Mark Hunter: I note the Minister's reluctance to put a specific figure on the increase. According to research that we have conducted, since 1977 regulated fares have increased by a staggering 43 per cent.—way above inflation—while unregulated fares have increased by an even higher rate. As we know, just this month the Government allowed an inflation-busting 6 per cent. increase in regulated fares. Does the Minister not think it is about time the Government committed themselves to a freeze in regulated fares to help hard-pressed commuters and other rail travellers?

Paul Clark: The Secretary of State has received a very few letters on fare increases for those franchises.

Lynne Featherstone: It is pretty widely accepted that the voluntary approach to managing the financial services sector has been an abysmal failure, yet the Minister just said that women will get equal pay. However, there is no proposition to bring in mandatory pay awards; there are to be only voluntary ones. What reassurance can the Minister give us that that will be any more successful, and will not end in equal failure?

Equal Pay

Harriet Harman: Because there are many things that lie behind unequal pay for women, we are acting across the board to tackle it, particularly by supporting women who are going out to work as well as caring for families with young children or older relatives, and by strengthening the law to tackle discrimination.
	May I say how intriguing it is to see that the Conservative Front-Bench team for women and equality consists of 75 per cent. men and 25 per cent. women, but perhaps it is a good sign that the men in the Tory party are applying to join the honorary sisterhood.

Ian Pearson: With permission, Mr. Speaker, I shall repeat a statement made by my noble Friend the Secretary of State for Business, Enterprise and Regulatory Reform. I begin by extending a warm welcome to the right hon. and learned Member for Rushcliffe (Mr. Clarke), who has returned to the Opposition Front Bench.
	I want to make a statement on the Government's plans to help the British automotive industry to weather the downturn in the global economy. The automotive industry—with its nearly 1 million employees, from manufacturing to retailing, and its £10 billion in added value to the economy—is in the front line of the downturn, with its output falling faster and further than any other sector's since the summer.
	We need to counter that to prevent an irreversible loss of capacity, skills and technology. The health of the automotive industry is vital to the strength of manufacturing in Britain and is at the heart of many of our regional economies. The industry and its supply chain will benefit from the measures that the Government have already taken to boost the economy. Those include the VAT cut, which saves consumers hundreds of pounds when buying a vehicle, and Government guarantees that secure £21 billion in new and existing credit lines and lending for businesses, many of them in the automotive industry supply chain. However, I recognise that we need to do more. Today's measures will give a specific boost to the industry, providing real help and laying the foundations of its reinvention for a low-carbon future.
	The industry is not a lame duck, and this is no bail-out. The industry has been transformed over the past decade. Productivity has risen, catching up and overtaking that of both France and Sweden. In Britain today, we have some of the world's most productive car plants. For the future, Britain needs an economy with less financial engineering and more real engineering. The car industry can and should be a vibrant part of that future. The steps that we are taking today will help companies to speed their way to becoming greener, more innovative and more productive. This is the route to securing jobs for the long term as we build a more balanced economy for Britain's future.
	The world's car industry is at a turning point. In Britain, we need to be at the leading edge of the development of low-carbon vehicles and green manufacturing. This offers a major business opportunity for us. However, this greening of industry needs investment in plant, research and development. Today I can announce that to back that investment, we will provide loan guarantees to Britain's automotive manufacturers and large suppliers. First, we will offer guarantees to unlock loans of loans of up to £1.3 billion from the European Investment Bank. Secondly, we will offer guarantees to support up to a further £1 billion of lending, or loans where appropriate, to cover worthwhile investments that are not eligible for EIB support or that will bring special value to Britain. Applications will be assessed by us on a case-by-case basis. There is no blank cheque on offer; there are no operating subsidies. We are committed to ensuring that anything backed by the scheme offers value for taxpayers' money, enables us to green Britain's economic recovery, delivers significant innovation in processes or technologies for the long term, and supports jobs and skills in Britain.
	To support these aims, the Government will build on their programmes that are currently supporting the automotive industry. To further strengthen the sector's skills, we are increasing funding for the training of all employees. We have developed a package to tailor the Government's Train to Gain programme to meet the automotive industry's specific needs. If there is the demand from the industry, my right hon. Friend the Secretary of State for Innovation, Universities and Skills will boost the funding to support new training to £100 million from its present £65 million. This offers real help to people, including workers in small and medium-sized enterprises in the automotive supply chain. The £50 million economic challenge investment fund that is being announced separately today by the Higher Education Funding Council also creates new opportunities for automotive employers looking to tap into academic expertise in improving business performance.
	Earlier this month, my right hon. Friend the Transport Secretary announced the provision of £250 million to support consumers switching to ultra-low-carbon cars, but we want the car industry in Britain to meet that demand for low-carbon cars. So alongside our loan guarantees for the greening of the industry, the next element of today's announcement is that I am inviting the regional development agencies to work with the Technology Strategy Board to bring forward a further step change— [ Interruptio n ]—in our programmes for research and development into cleaner engines, lighter cars, plug-in hybrids and components for electric vehicles.  [ Interruption. ]

Fraser Kemp: The car industry and its work force at Nissan in my constituency and throughout the United Kingdom have had to face the consequences of a dramatic downturn. I want to ask two questions. First, while I realise that the Minister cannot name a time, may I urge him to ensure with the utmost speed that Lord Davies presents specific proposals on car financing? Secondly, will the Minister commit himself to working with his European counterparts to ensure that there is co-ordinated action to try to help the car industry? Given that 76 per cent. of the cars produced in my constituency are exported to Europe and the rest of the world, European and wider, global co-ordination is essential to help the industry.

Edward Garnier: Can the Minister explain briefly the practical differences between the over-£25 million turnover and under-£25 million turnover schemes? Many companies in my constituency make components for the automotive industry but do not exclusively do so. Are they eligible? Will the schemes also cover those who contribute towards military vehicles and those who make trailers?

Richard Burden: I pay tribute to the efforts that my hon. Friend personally has made on this issue. Coming from the west midlands as he does, he knows that the automotive industry and companies such as Jaguar Land Rover in particular are part of the glue that binds together our regional economy and on which the skill base and so many jobs depend. I welcome the lines of credit and loan guarantees that he has announced today, particularly for low-carbon technology, but if they are going to work, I emphasise the importance of their going into effect quickly, particularly if they are going to link to institutions such as the European Investment bank.

Ian Pearson: I agree with the hon. Gentleman that it is important to increase demand. We all want to see greater demand in the economy, which is why boosting demand through a fiscal stimulus is the right thing to do. He mentioned scrappage schemes, and he will be aware that the German scrappage scheme is pretty contentious. It has not been introduced and there is some debate about whether the Lander want to approve some of it. In my view scrappage schemes look expensive and would be best done at a European-wide level, rather than in individual member states. In many ways, at their best they probably underpin the second-hand market rather than encourage people to buy new cars. It is not as simple as a lot of people think when they are discussing these issues.

Andrew MacKay: May I gently put it to the Minister that it was not synthetic anger that he heard from this side of the House, but it was deep, deep concern that this Government have dithered while car sales have dived, and that they have done nothing for three months? Does he not realise that the only way we will increase car sales in the longer term is by reducing production in the short term, which will improve residual values and allow people to afford to buy a new car?

Ian Pearson: The simple fact is that car sales have dropped almost all over the world: they are down significantly in the United States; they are down in Spain; they are down slightly less in France; and they are down in Germany. This is an economic problem that we are facing right across Europe. It is a problem that, as we have all said, originated in the United States, and certainly in its automotive sector there are major problems with new vehicle sales.
	What we have to do as a Government is try to assess what are the most effective and appropriate measures that we can take. The measures that we have taken to support industry in general, such as the working credit scheme, the enterprise finance guarantee and the fiscal stimulus, are all sensible and appropriate steps for the Government to take. We have gone a step further today, specifically in respect of the automotive industry. I believe that, again, it is right that we do so, because that industry is encountering some dramatic problems. We should not pretend that this is just a UK problem—it is a European and a global one.

Ian Pearson: We are happy to look at all constructive suggestions about what more we can do to help the van and truck industry during these difficult times. My hon. Friend mentions procurement, which I sometimes think we ask to do everything—we want to see green procurement, and we want procurement to achieve a number of other objectives too. He is right to say that we need to be thinking about what cars, vans and other equipment the Government want to purchase in future. On the market for low-carbon vehicles for the future, I strongly believe that it is strategically important that the UK makes some medium to long-term decisions about its purchasing intentions, in addition to investing in research and development and new technology, so that we can have a home-grown, low-carbon green industry. That is what we are working towards.

Sandra Gidley: The Minister will be aware that the commercial vehicle market is being hit harder than the car market, and that Ford in Southampton has had a particular problem. It assures me that although people want to buy vehicles—that compares with the Minister's indecision on this—the finance is crucial. When will Mervyn Davies finish his report? How many jobs does the Minister expect to be lost in the meantime?

Jim Cunningham: May I suggest to the Minister that when the Government meet the car manufacturers tomorrow he should bear in mind that Jaguar Land Rover is at the forefront of developments on environmentally friendly cars? I visited the plant yesterday, and I was very impressed. Will he also bear in mind that thousands of jobs in Coventry and in the west midlands are at stake, and that a lot will rest on the outcome of tomorrow's meeting? May I stress once again to him that lots of people in Coventry fear for their jobs, and that if Jaguar Land Rover goes, it goes for the suppliers too?

Ian Pearson: Bentley is a great brand, but I know that the company is having difficulties, because as with other companies in the automotive industry, people are not buying its cars. That is one of the reasons why it has had to make some of the decisions that it has made recently to cease production for a period. There are challenges facing Bentley, just as there are challenges facing all our major car manufacturers in the UK at the moment. What the Government can only do is look at what sort of sensible measures we can put in place to help the industry, and the working credit scheme will help many companies in the supply chain, especially as the cessation of production by some companies creates enormous problems for a lean, integrated, just-in-time supply chain. We will continue to work with the industry on tackling the problems that it faces and providing solutions where it is sensible to do so.

Ian Pearson: In the first instance, if the hon. Lady wants to e-mail me with the details I can get some officials to look at that matter right away. We will see how we go from there, but if it is appropriate to have a meeting I will be more than happy to do so.

Margaret Moran: I particularly welcome the training and greening initiatives that my hon. Friend has outlined, which appear to be in stark contrast from the do nothing or lay workers off policies of the Opposition. The provisions will be of particular use to IBC Vans in my constituency, a company that is very highly productive but where workers are facing a 30-hour week from February. May I press the Minister further on the issue of tax incentives to businesses to purchase fleet vehicles, as I think that they would benefit small and medium-sized enterprises, IBC Vans and white van man?

Ian Pearson: My hon. Friend is absolutely right to point out the importance of the green and training components of the packages that we are announcing. I want to support white van man, too. I want to ensure that white van man has the confidence in his business to say that he wants to buy a new white van because he can see the business opportunities in the future. Restoring that confidence is vital. There is an important point to be made about the fleet market and we are open to discussions about whether more can be done in that policy space. As I said, my hon. Friend is right to point to the green and training aspects of the package, which will both be welcomed.

Roger Williams: It is difficult to overemphasise what a parlous financial state many car dealerships find themselves in. One in my constituency reports sales of new cars dropping from more than 30 a month to fewer than 10 a month. If those businesses fail, all the other measures will count for nothing. I urge Mervyn Davies to get on and do his work as quickly as possible but also to investigate other ways to support those businesses, such as the relief of business rates. They have to be paid every month regardless of the level of business, which is causing the businesses great distress.

Ian Pearson: My hon. Friend makes a very good point. The RDAs, with Business Link as their agent, have a primary responsibility in promoting a range wide of Government services through the Business Link brand. He will be aware of the Solutions for Business programme, which provides a range of different Government support in addition to the measures such as the enterprise finance guarantee scheme that I have mentioned already today. We must make sure that we have the most effective communication channels out there. Companies are facing challenges, but sources of funding are available that are either backed or directly funded by the Government. We will see whether there is more that we can do to make sure that MPs have the information that they need, because I am acutely conscious that lots of MPs are being approached all the time by companies that are having difficulties. They need to signpost those companies in the right direction.

Several hon. Members: rose —

Mr. Speaker: Order.

James Purnell: I beg to move, That the Bill be now read a Second time.
	I should like to start by welcoming the right hon. Member for Maidenhead (Mrs. May) to her new post. I also welcome the hon. Member for Northavon (Steve Webb) back to his old post, although we are no less happy to see him for all that. I know that we will disagree on many things, but also that their scrutiny will improve this important Bill. I look forward to working with both of them, where we agree.
	In the debates ahead of us, we shall hear much jargon. We will hear talk of contribution conditions, taper rates and conditionality, but it is important that we start by remembering what the Bill is about. It is about changing lives—of the people who have been stuck on incapacity benefit for too long and of the lone parents who could work if they knew about the support available to them. The Bill is also about giving disabled people control over the public services that they receive, instead of them being controlled by the bureaucracy.
	This Bill is based on the simple idea that people will be given more support and, in return, more responsibility. That is not the Government's idea, nor the Opposition's. It was expressed in the Beveridge report—indeed, it is one of his three founding principles.
	In his report, Beveridge said:
	"social security must be achieved by co-operation between the State and the individual...The State in organising security should not stifle incentive, opportunity"
	or responsibility.
	The Bill is intended to renew the partnership between the state and the individual by ensuring that virtually everyone on benefits is preparing for work, so that support is matched with responsibility. We will support people, but in return they must support themselves. Some people have asked why we are taking measures now. The answer is simple: it is because it would be wrong to abandon people. If we gave up on welfare reform now, we would be condemning people who find it harder to get back into work to not being able to do so. That is precisely the mistake made in the recessions of the '80s and '90s, when conditionality and investment were cut, and unemployment rose more than it need have done.
	Governments have a choice: we can either invest millions now in helping people back into work, or we can waste billions in the future when we cannot get people back into work because it has become too difficult. We have a choice between an ambitious welfare state that lifts people out of dependency and a passive one that traps them there.

Terry Rooney: My right hon. Friend rightly talks about the rights and responsibilities agenda. Of course, the responsibilities of claimants are enforced through sanctions, and the state's right to co-operation is enforced similarly, but the responsibilities of the state to the claimant and the rights of the claimant tend to get diminished. Will he consider the idea of a claimant's charter, in which those rights and responsibilities are clearly delineated? Claimants would then know what they could expect, as well as their obligations.

James Purnell: If the mother says, for example, that she is unable to do so, which happens, or does not want to because of, for example, fear of violence, we will take the mother's word. There is a careful balance between changing the system so that the default is that the father is registered and, on the other hand, going too far and involving the father where there is a threat to the child.

James Purnell: The matter is partly about evidence and partly about the wishes of fathers. At the moment, fathers feel that it is far too complicated to register when they are not married. There are lots of examples in which fathers wanted to be involved but were unable to do so. It is only fair to say that if we expect fathers to live up to their responsibilities, they should also have the right to be on the birth certificate. I am not saying that this is a magic policy that will solve all those problems, but combined with the other things that we are doing, it will help fathers to live up to their responsibilities and to be properly recognised.

John Robertson: My right hon. Friend mentioned access to work and getting people into work, but the Government have not fulfilled employment retention needs. They have touched on the edges of the subject and helped in some ways, but is it not time that we took the matter on board and wrote it into the Bill, so that every company and the Government must consider employment retention and ensure that they keep people in employment?

James Purnell: My hon. Friend is a fervent campaigner on employment retention. We believe that his goal is met by the existing legislation on disability, but we are working particularly on examining how we implement the Equality Bill to see whether we can give him more reassurance. For example, we could point to examples of companies that have considered employment retention as part of their compliance with the Disability Discrimination Acts. We are happy to keep working with him on the matter.

James Purnell: The right hon. Gentleman is right to suggest that there is an issue with the system. People can lose their benefits if they refuse a reasonable job—the Conservative party proposes to introduce that, but provision for it already exists. It is difficult to sanction someone on the basis of their doing a bad job interview, even if it is done purely to avoid going back into work. Professor Gregg recommended a quicker, clearer but escalating system, whereby people are warned, and have the reason for a potential sanction explained to them, so that the sanction is not based on misunderstanding. One can take away people's benefits for a week or four weeks, and require them to come in to do full-time activity or things that the adviser believes will ensure that they comply with the system. We must strike a balance between ensuring that we treat people sensitively and do not cause them undue hardship, and ensuring that they carry out their obligations.
	Indeed, I believe that the right hon. Gentleman, in his report on a commission for social justice, said that workless parents should have to come in for interviews and undertake preparation for work. That is the policy that we are proposing in the Bill. Unfortunately, unless the right hon. Member for Maidenhead performs a second U-turn, Conservative Front Benchers will oppose it. I therefore hope that the right hon. Gentleman will support us and have a word with his party leader, who said just before Christmas that he opposed the policy and obviously had not read the report on a commission for social justice. We have read it and learned from the bits that we think we would work.

James Purnell: My hon. Friend makes a good point. I do not say that we should not sanction people who behave in the way he describes, but that it is hard to find out when they are doing that. When it is clear, we can take away people's benefits.
	However, my hon. Friend prompts me to deal with clause 1, which covers exactly those circumstances. It requires people to work for their benefits and those who play the system are required to do full-time activity precisely to deter them from claiming and working at the same time, and to provide incentives for those who try to avoid their responsibilities to move into work. That is right as a deterrent and because it would teach people basic work skills, which they may have lost if they have been out of work for a long time. With the changes to sanctions and the requirement for full-time activity, the regime for jobseekers generally works pretty well.
	In the past, the system has worked less well for people who are outside the JSA regime. We therefore introduced pathways and the new deal for lone parents. The Gregg review recommended that we go further and create a new category in the benefits system for those who are preparing for work. They do not have to take work immediately, but must prepare for their return to work at the right time. We strongly agree with that and we want to introduce it.

James Purnell: I am happy to give that assurance. Indeed, the Gregg review covered that. Workfare is a system whereby people are punished and distanced from the labour market by removing their entitlement to work search and by their being stigmatised. We propose full-time activity, supported by looking for jobs and helping people with their skills, to ensure that they get back into work rather than being distanced from the labour market.

James Purnell: That is a very good point. Indeed, the Leader of the Opposition argued recently that there were 5 million people on benefits, each of whom was a potential Karen Matthews. That is the wrong argument, because it stigmatises people, and because the vast majority of people on benefits do want to get back into work.
	To match the changes that we are making to the conditionality regime for people who are sick and disabled, we will also invest more. We are spending £1 billion more on pathways to work between now and 2011, and we will also bring in the new changes recommended by David Freud—the invest to save model—so that people will be able to invest in helping people back into work and be paid back out of the benefit savings that they get. That will cover 20 per cent. of the country, and could lead to a radical change in the system— [ Interruption. ] Opposition Members ask when that will happen. It will be from 2011, and it will happen at exactly the pace that David Freud has recommended. The Conservatives like to pretend that this is some kind of magical piggybank, but if they know of people who want to invest in these projects now, and who will do so further and faster than we are doing, they should ask them to come forward. I would be very surprised if they can find people in the City who will do that. David Freud has said that this is the right pace at which to go. Indeed, the Conservatives used to say that they liked David Freud's proposals.
	That will be the right way forward for people who are sick and disabled. We also think that it will be the right way forward for workless parents. Workless parents already have to come in for interviews, but, if they do not want to carry out their action plan, they do not have to do so. We believe that the vast majority want to carry out their action plan, but it should be possible for an adviser to say to those who do not that it is now time for them to do so. That will reduce child poverty, and ensure that more people get back into work.
	The Conservatives are not prepared to give money to certain people. One of their main policies in this area is to increase tax credits, but not for lone parents. Another is to have a transferable married person's tax allowance, which would also not help single parents. They are not prepared to give more money to single parents; nor are they prepared to help them into work. They are prepared to stigmatise, but not to help people with money, or not to help them get into work. I hope that the right hon. Member for Maidenhead will change her policy on that and agree with the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith).

Katy Clark: Does my right hon. Friend recognise that there is great deal of concern, particularly about people with young children who simply may not be able to carry out the kind of work-related activity proposed in the Bill? Will he confirm that everybody's personal circumstances will be taken into account because, in some families, it is in the interest of neither the parent nor the children to go down this path? Will the particular circumstances override the simple view that work is the most important thing?

James Purnell: If my hon. Friend has some suggestions, we will be happy to look at them. We have met a few times to discuss this matter but it is obvious from the second part of his question that we have not gone as far as he would like. He has great expertise in this area.

Theresa May: I thank the Secretary of State for his welcome. I do indeed look forward to debating with him over the coming months, and I hope we can work together to find practical and sustainable solutions to some of the difficult issues that face us today. I particularly hope that we shall be able to agree on policies that will make a real difference to people's lives, especially as those people struggle to come to terms with the impact of recession.
	The Secretary of State may remember that I have shadowed the employment brief in the past. I am delighted to return to it, particularly as at that time also I was dealing with welfare reform. It has taken the Government some time to get here, but I welcome their conversion to the need for reform of our welfare system.
	Before I comment specifically on the Bill, let me pay tribute to my hon. Friend the Member for Epsom and Ewell (Chris Grayling). When he shadowed this brief, his work was radical and daring. Not only has that work informed Conservative policy, but it can be traced to the Bill. I am grateful to my hon. Friend for developing such a strong foundation of work that not only can we build on it further, but the Government have clearly taken it on board as well. Certainly a change of personnel does not mean, in any sense, a change of direction or commitment.
	I recall that on 21 July last year, the Secretary of State said to my hon. Friend the Member for Epsom and Ewell:
	"If something is the right thing to do for the country, that is exactly what we should do."—[ Official Report, 21 July 2008; Vol. 479, c. 533.]
	On welfare reform, we will help the Government to achieve what we believe is right for the country—possibly, I suspect, in the face of opposition from some Members on the Secretary of State's own Benches. We believe that welfare reform is right for the country, and also right for people who find themselves out of work and relying on support from the state.
	We know that in Britain today nearly 5 million people are claiming out-of-work benefits, almost 2 million of whom have been claiming for five years or more. As we saw from the unemployment figures last week, that overall number is now rising quickly, and unemployment is at its highest level since 1997. But, of course, behind the numbers the human story is even starker. There are families in which generational worklessness is the norm. There are people who live their whole lives dependent on handouts from the state, and for whom benefit income is the only kind of income that they will ever experience. Work is not just a way of bringing in money; it is about giving people dignity and purpose, and it is also the best route out of poverty.
	As I have said, the Government are right to tackle this issue. Indeed, I thank them for the compliment that they paid us in drafting the Bill. It is refreshing to see so many of our own ideas being enacted. It will therefore come as no surprise to the Government when I say that we broadly welcome the direction that they are taking, and will support the Bill today. There are areas of concern which I want to raise with the Secretary of State, but first I wish to dwell on another issue, which no doubt the Secretary of State has had to face down and to which, indeed, he referred in his speech: the whole question of whether the Government are right to tackle welfare reform now, during a time of recession.
	I believe that it is right to press on with reforms. They have been needed for over a decade, and the Secretary of State's predecessors in the role have failed, often at the first hurdle. I am delighted to observe that the Secretary of State is not so faint of heart. His determination is, I believe, even more necessary now than it has been in the past 12 years of Labour government, precisely because we are experiencing an economic downturn.
	In view of the figures published last week showing that the number of unemployed has now hit 1.92 million—not including, of course, the redundancies announced in December and so far this month—providing better-targeted support for the unemployed is particularly necessary. There is a separate argument to be had about what Government should be doing to encourage the creation of more jobs and to protect those that remain, but that is not for our debate today. Today we welcome the Government's commitment to welfare reform, and, while regretting their failure to act earlier, recognise that given the greater number of people who will be relying on the welfare state in the months to come, improving and strengthening it are urgent tasks.
	There are some parts of the Bill that we welcome wholesale—for example, the measures on the right for disabled people to control the provision of services. The Government's own evidence from previous pilots of individual budgets shows that they give people more control over the care that they receive and lead to better outcomes. The Government need to ensure that this is made a real priority so that the many disabled people who could benefit from more personalised services are not made to wait any longer.
	However, there are other areas where I am disappointed that the Government have not gone as far as is needed with the reform of the welfare system. The right hon. Gentleman may like to be seen as progressive and determined. I fear he may be a lonely, dissenting voice among the ranks amassed on the Labour Benches. Perhaps that is why his rhetoric is stronger than his Government's actions. Nowhere is that more clear than in the lack of support these reforms are offering to people on incapacity benefit to return to work.
	When the Secretary of State published the Government's White Paper in December, he declared it was based on
	"a simple idea that no one should be left behind, that virtually everyone should be required to take up the support that we know works."
	If only that were the case with the Government's approach to existing incapacity benefit claimants, because all 2.6 million of them will be left behind by these proposals.
	What is the Government's radical plan to help these people back into work? It is an interview in the jobcentre. That is all the support that the Government will offer to the 1.2 million incapacity benefit claimants who are over 50. The other 1.4 million IB claimants will get three interviews at the jobcentre. The right hon. Gentleman may have a different idea of support from me, but a plan to offer people who have been out of work for some years—decades, for some—an interview at a jobcentre is not radical or fair. It is no use saying that support will be available on a voluntary basis because, as the Secretary of State himself said, the take-up of voluntary schemes is very limited. The Government have admitted that only 5 per cent. of people on incapacity benefit take up such support already.

James Purnell: The right hon. Lady is wrong. Twenty per cent. of the stock will be getting the Freud pilots. When we roll that out, it will apply to the whole stock of people on incapacity benefit. They got nothing under her Government. It is only the Government who are bringing in support for people. She is simply wrong.

Theresa May: The Secretary of State has just hinted at precisely why he is not able now to offer the greater support that those 1.2 million people on incapacity benefit aged over 50 need. The reason is that the Government are being too timid in another area of reform, which is the issue of funding for the additional back to work places that will be needed following the assessments of those on incapacity benefit. By not fully implementing the changes to the Treasury rules to allow money saved in, and here we get into the jargon, the annually managed expenditure budget to be spent on the departmental expenditure limit budget—the so-called DEL-AME switch; put simply, it means taking the savings from taking people off benefits and into work and enabling them to be used to provide the programmes that support that process—the Government have limited what they can do on welfare reform. They have limited themselves to pilot projects in five areas without any chance of expansion until 2013. There is where the problem lies with what the Secretary of State is proposing.

Theresa May: I thank the hon. Lady for her intervention. All I would say in response is that 2.6 million people are still on incapacity benefit, 70 per cent. of whom started their claims under this Government. I refer her to the blog posted by her party colleague the hon. Member for Glasgow, South (Mr. Harris), who says:
	"The scandal of incapacity benefit (IB) claim levels is one for which the government should take its share of the blame; IB culture has led not only to a huge expense on the public purse but also, more importantly, to an unacceptable waste of human talent and resource, and contributed significantly to the growth of the underclass."
	Let me move on to another area of concern. After so many years in which the Government have failed to produce welfare reform, many of their proposals remain unclear, unfinished and undecided. One example of that is the social fund. In November, the Government published a consultation on the social fund in which they proposed charging interest rates of up to 27 per cent. on loans to some of society's most vulnerable households. Unsurprisingly, these plans caused outcry, and the Government quickly backtracked, yet the Bill includes plans to press ahead with these reforms as set out in the consultation. Ministers have been saying that they have no intention of charging interest on these loans, but if that really is the case, why on earth does it not say so in the Bill, because this Bill leaves open the possibility that external providers will be able to charge interest on social fund loans?

Theresa May: First, the consultation paper makes it absolutely clear:
	"To fund the cost of these extra services, we are proposing that the credit offered under these arrangements could attract an interest charge of 1-2% per month".
	I also say to the Secretary of State that I have read the Bill. It does not say that interest cannot be charged; what it says is that the Secretary of State will bring forward regulations on the terms and conditions under which these loans can be made available. I shall come on to the further point about the sorts of regulations the Secretary of State has under the Bill, but why did he put those words in his consultation paper if he does not believe that interest should be charged by external providers on these loans, and why has he not expressly put that in the Bill?

Theresa May: If the Secretary of State thought it was legally impossible, why has he admitted that there is a possibility that interest will be charged on these loans by putting it in his consultation paper? There will be further discussion on this issue when the Bill reaches Committee, but our position is clear: we believe that the Government should not be creating a two-tier approach to these social fund loans and he should not potentially be charging those sorts of rates of interest to some of the poorest people in society, who need access to this money.
	Another area of concern for many people—this was raised by one of the Secretary of State's Labour colleagues a little earlier—is the Government's planned changes for lone parents. Our green paper published last year proposed that lone parents should be transferred to jobseeker's allowance and required to seek work actively once their youngest child turns seven. The Government initially agreed with us, but their proposals now go further.  [Interruption.] The Secretary of State puts up his hands and says "Five", but when we published our green paper we said seven—he could go back and check that. The Government would now demand that parents with younger children engage in what is described as "work-related activity".
	We will want to probe the Government on exactly what they mean by that. How much of a commitment in both time and activity will they demand from lone parents with very young children? The Government say that the activity plans will be drawn up in partnership with lone parents, yet they want the power to direct them to do activities to which they have not agreed under that partnership. How will child care be provided? In many areas up and down the country good-quality, affordable child care is not available to these parents.
	The Secretary of State says that he wants to introduce new conditions for lone parents who have children aged three to six, but I fear that he may go even further—down to lone parents with children as young as one. As he told  The Times last year:
	"I wouldn't rule out going down to one".
	Crucially, what sort of sanctions do the Government intend to impose on lone parents who do not comply? If the sanctions are to be financial, I would remind the Secretary of State that these families are often among the poorest in society. If the penalties are to be paid in time, I would ask how the child care will be provided and funded. Understandably, clarification of the detail behind this proposal is needed. Although my party and I agree that parents should be supported to get back into the workplace, it is crucial that parents of very young children are given the freedom and support to determine how they manage that choice.
	Another issue on which we will be seeking clarity from the Government in Committee—the Secretary of State referred to this matter earlier—is that of sanctions against absent parents who are not paying their child maintenance. The sanctions are to be in the form of taking away passports and driving licences. He and his Ministers have been keen to use this provision as a media hook, but, as I said, it was a Minister in the House of Lords who on the Report stage of the Child Maintenance and Other Payments Bill agreed that the power should remain with the courts. All parents have a responsibility to support their children, no matter what their family circumstances. Although I welcome measures to aid that, I shall seek more detail from the Government on how this provision would work in practice, particularly as regards an effective and efficient appeals system.

Theresa May: The power already exists, and the answer is yes. I am looking at the sort of provisions that the Government are proposing in the Bill, and there are two ways those could go. The Bill contains a lot of caveats—for example, licences will not be removed from people who need theirs for work because, obviously, if they are not able to get into work, they would not be able to earn the money then to pay the child maintenance. So there is a question as to how many people this would actually affect. It is also important that there is an appeals mechanism, and there are other issues to be addressed—for example, the level at which an officer in the child maintenance organisation would be able to determine that this provision should be used.

Ian Davidson: Following the comments about accountants being generally a bad lot, does the right hon. Lady agree that the activities of some accountants who clearly assist men in particular to skew their financial affairs in a way that allows them to avoid their responsibilities should be examined? It should also be policed by the appropriate professional associations which appear only too willing to condone that sort of behaviour through their inactivity.

Theresa May: In common with all hon. Members, I see cases in my constituency of parents, usually mothers, who are desperate because they believe that the other parent is living the life of Riley while they are not getting child maintenance. However, the whole issue of ensuring the proper payment of child maintenance is one with which the last Conservative Government and this Government have wrestled for many years.
	All the issues that I have mentioned give rise to another matter of general concern about the Bill, which is the extent to which it relies on future regulations to put its intentions into practice. Mencap has said that it is
	"deeply concerned that some of the most crucial aspects of the Government's welfare reform agenda will, under this Bill, be brought into legislation by regulations which have not yet been written nor debated by Parliament, rather than primary legislation. The Bill refers to regulations 387 times in its 114 pages—more than three times per page. We are very concerned that there will be no opportunity for adequate scrutiny of these major changes to the benefit system."
	Similarly, Mind shares that concern, and says:
	"it is difficult to welcome without reservation a Bill which leaves many of the details of the proposed reforms to be set out in as yet unpublished regulations."
	I hope that when the Minister winds up he will be able to give the House a categoric assurance that draft regulations on at least the key proposals in the Bill will be available for scrutiny and debate in Committee. I also hope that as the Bill makes its way through this House and the other place Ministers will keep an open mind about some of these concerns.

Theresa May: I know that the hon. Gentleman has tried to introduce legislation on that issue, although it turned out that what he was trying to achieve had been covered in the Disability Discrimination Act. However, I accept that there are often issues about implementation of the requirements in statute. As I said, we believe that much can be done to help the many disabled people who want to work to enter the workplace, and—through the payments over which they have control—to have much more control over their lives and decide which services will help them best.
	The Government have promised many times that they would finally reform welfare, but every time they have made that promise, they have failed, because too many Labour Members believe that to support welfare reform is not progressive. However, there is nothing progressive about just handing out cash for being out of work. Real progressives—like the Secretary of State and I—know that we need to reform welfare so that we can help people to help themselves. That is why we Conservatives support this Bill. As it passes through Parliament, the Secretary of State will come under great pressure from many of his colleagues to backtrack. In those circumstances, we will support him if he stands firm, but I shall certainly be watching over his shoulder to ensure that he does so. If he does not, hon. Members can rest assured that he and his colleagues will be replaced by a Conservative Government who will be utterly determined to introduce real welfare reform and to get Britain working.

Terry Rooney: May I join in welcoming the new shadow Secretary of State to her position? She has certainly increased the comedy element, and I hope that she spends many years in that position. I also welcome the return of the eternal hon. Member for Northavon (Steve Webb), who has spent a long time dealing with this issue.
	I welcome the broad thrust of the Bill and the proposals in it, not least because most of the ideas were originally suggested by the Select Committee on Work and Pensions—at least, all the good ones were. In the limited time available, I want to pick first on the issue of simplification. I know that the Secretary of State is wedded to the idea of simplification—simplifying the benefits system has been the holy grail for the past 60 years—but I caution him to go slowly and carefully along that route and to bear in mind that a consequence of simplification is the diminution of the rights and benefits of women. There are very serious issues to do with that.
	In recent years, the amount of money lost to fraud has plummeted, but the amount lost to error has stayed more or less the same as a consequence of some of the complexity in the system. The Secretary of State knows that I am a good friend of his—I do not like falling out with him—but I do not think that removing a benefit and then having three different categories of benefit to cope with that removal is a process of simplification. That is a problem. Sadly, people's lives do not fit into neat boxes. When we are considering simplification or reform, we should understand that creating three categories of jobseeker's allowance to cover such a change is part of the issue of continued non-simplification. I think that everybody would welcome any progress, but the Secretary of State needs to take a cautious route and to be aware of the consequences of such changes.
	Despite the valiant but unfounded efforts of the right hon. Member for Maidenhead (Mrs. May) to state otherwise, there has been significant welfare reform over the past 10 years. We now have an extremely active welfare system instead of the extremely passive system that existed in the past. Many of the provisions in the Bill for an active welfare state should be welcomed, but they are heavily dependent on two things: resources and extremely good personal advisers.
	I know that the Secretary of State has recently been very successful in getting additional resources despite the economic situation, but there is a danger that the psychology of asking why we should do that when there are no jobs takes over. We have heard some of that today, but the idea that there are no jobs is a myth in itself. Apart from anything else, about 800,000 people retire every year, which means that jobs automatically become available. The churn every month is in excess of 200,000. There are still lots of jobs and job opportunities out there, and even if somebody cannot get a job today it is right and proper that the state should prepare them to get a job tomorrow, next month or in three months' time. It should not wait until the jobs are allegedly available.

Terry Rooney: I am sympathetic to what my hon. Friend says, although I suspect that it would be difficult to find one person with enough knowledge of these matters to be an expert. What we need is much better signposting for people, and a much better exposition of their rights and means of redress. The benefits system still has many barriers that hinder people's return to work. Instead of being an inducement to people to try out work, the 51 different income disregards often are an impediment.
	There is an interesting debate to be had about mini-jobs—for instance, lone parents are not allowed to work between four and 16 hours a week. Although we must be cognisant of the danger that people will merely get a series of mini-jobs and not engage with the welfare system, flexibility must be the key word for personal advisers. If a mini-job is going to help someone move to more permanent employment, it must be allowed. After all, tools such as mini-jobs, disregards and access to education and training will all be used by private providers.
	The benefits system does not allow much in the way of education and training. Why should people be able to access things that will help them to get employment after 12 months out of work, but not in the first six to nine months? We need to rethink where the rules and regulations came from. Many have been in existence for 30 or 40 years, and are no longer relevant to today's labour market and work force. Perhaps we should set some of them aside, or at least give personal advisers more flexibility to support people in doing educational or training courses that will make them more employable.
	Two years ago, the Department for Work and Pensions contracted for 40,000 places on courses teaching English as a second language, but only 15,000 were taken up. Employment among certain ethnic minorities is far too low, but although many people say that the barrier is the English language, why are they not taking up the courses on offer? Is it a failure by the Department or by the individuals involved? The Government provided the funding and secured the places, yet 60 per cent. have not been used, so there is clearly a problem.
	It is becoming more and more crucial as the recession develops that people get a skills audit and that any skills deficit is made up. In my Jobcentre Plus area, there are almost exactly the same number of jobs to be filled as there are jobseeker's allowance claimants, but there is a significant difference between the skills of people on the claimant count and the skills needed in the available employment.
	The more that we join the Leitch agenda with the welfare reform agenda, in the spirit of joined-up government, the more we will remove some of the silly barriers that exist between the learning and skills councils, the regional development agencies and the colleges. By making them work for people, and not for themselves as providers, we will improve our chance to give people the tools and skills that they need to get back into work.
	I know that time is short, so I shall conclude by saying that we must press whoever in the Treasury is in charge of the child care tax credit review to publish it. Sadly, it has been a significant failure, with only a third of people entitled to child care tax credit actually taking it up. We know that, for many people, child care is the key to getting employment, so if it is a policy failure, let us change the policy so that it helps rather than impedes people.
	As I said at the start of my speech, I support the general thrust of the Bill. We must work on the basis that people who lose their jobs will suffer only a temporary loss. We must get them back into work as fast as possible, but it is also important, especially for people with mental illness, that we continue to support them after they get back to work, because we must make sure that people stay in their jobs.

Steve Webb: It is pleasure to follow the Chairman of the Work and Pensions Committee, who made a characteristically well-informed critique of the Bill. It is nearly four years since I last shadowed this Department. I seem to recall that, at that time, a Secretary of State had just published welfare reform proposals that were the boldest since Beveridge—or since the ones that came immediately before; I cannot remember which. That Secretary of State had just promised a crackdown on dads who would not pay child maintenance, so today seems like déjà vu.
	I thank the Secretary of State for his earlier welcome. He and I go back a long way in this field. He will recall that his predecessor but seven, new Labour's first Secretary of State in this area, was the present Leader of the House. Introducing the Bill that became the Social Security Act 1998, she said that she wanted to
	"develop a modern, integrated system that is simpler, streamlined and more efficient."—[ Official Report, 22 July 1997; Vol. 298, c. 784.]
	That Act did not quite achieve that aim, so when the present Chancellor introduced the Bill that became the Child Support, Pensions and Social Security Act 2000, he said that it was a "radical package of measures" that would be
	"fair to those who meet their responsibilities...but...tougher on those who are not prepared to face up to their responsibilities."—[ Official Report, 11 January 2000; Vol. 342, c. 164.]
	However, the proposals were clearly not tough enough, so when the present Defence Secretary introduced the Bill that became the Welfare Reform Act 2007, he said that it
	"set a new direction of travel for the welfare system."
	He added that it was a
	"major shift from...established orthodoxy".—[ Official Report, 24 July 2006; Vol. 449, c. 616.]
	Inevitably, the 2007 Act was tougher in some places and tenderer in others.
	So here we are again. Earlier, I thought of intervening on the Secretary of State to ask whether he thought that welfare reform was in a state of permanent revolution, or whether this Bill showed that the Government had arrived at the right balance between rights and responsibilities. Alternatively, if he stays in his post, does he envisage another Welfare Reform Bill being introduced in the next Parliament, and yet another in the one after that? One is tempted to think that a Government who keep on reforming things and then coming back and reforming them again may not have got their approach right. I wonder whether the Secretary of State thinks that the Bill is the end, or the final leg, of the journey, or whether the attitude is, "We'll have another go next year, and the year after." Welfare reform Bills are not quite as frequent as Home Office justice Bills, which fail every year; welfare reform Bills are about three years apart. It would be interesting to know whether he thinks that the journey is broadly over.

Steve Webb: Obviously, I do not know what happened in Aberdeen, so I cannot comment, but my point would apply in the case that the hon. Member cites. It simply would not happen that the dozen or so individuals would co-ordinate everything carefully and organise something collectively. It is 10 times more difficult to do things that way. That is what I worry will be lost if we go down that avenue.
	I have set out where we agree, but we Liberals are in profound disagreement with the Bill on the coercive power of the state and the extent to which it is to be used. I want to apply my point specifically to the provisions relating to people with drug problems. The Secretary of State envisages that people on benefits with a drug problem will be, shall we say, encouraged to go down certain paths—to have treatment and rehabilitation. I am sure that none of us would have any problem with that, but at the end of the line, if the person will not do what is proposed, the Government will take their money off them. The question is: what does the Secretary of State think that somebody with a drug addiction does when we take their money off them? What is the consequence?
	The issue of what happens after the sanctions are applied was missing from the right hon. Gentleman's entire speech. Of course we do not want to get to that point, but we absolutely, certainly will get to that point, particularly with the group of people that we are talking about. What happens next? We never get the answer to that question from the Government. What happens to a lone parent who is sanctioned and goes off benefit? They go off the welfare roll, so that is a tick in a box, but what happens to the mother and child? What happens to the person with a drug addiction who ends up off benefit?

Steve Webb: The hon. Lady made the point very well—lone parents who want that, who can already seek it and whom we should assist. But we are not talking about that. We are talking about coercing those who do not choose to work, with the ultimate threat of benefit sanctions. Those who want it already can seek it.
	Since 1997 the Government have regarded bringing up young children as a second class activity. It is not job search— [Interruption.] That is absolutely true. The first new Labour Secretary of State, the right hon. and learned Member for Camberwell and Peckham (Ms Harman), and the right hon. Member for Leicester, West (Ms Hewitt), who was Secretary of State for Trade and Industry, have admitted that new Labour got it wrong in its language on parenting.
	Initially, the only thing that mattered was paid work. I thought Labour had learned that spending time bringing up a young child—mum or dad—is an incredibly valuable thing to do. It is unacceptable that someone cannot say, with the support of society, "That's what I'm doing." I am extremely alarmed. I understand that the Secretary of State is tacking to the right on some of these issues, and this is one of them. He is missing the point about the value of parenting and the signal that society sends when it says, "As soon as your child is one year old, we are going to start checking up on you and whether you are looking for real work." That is not my policy or that of my party.

Steve Webb: As I said at the start of my remarks, I have no problem with the Department engaging constructively alongside people as soon as they engage with the system, but not in a coercive way. That is the distinction. What is backing the Government's policy is threats, otherwise they would not need legislation. We would not be discussing the Bill today if there were no threats because it would not be necessary to legislate. It is about coercion, which we object to. We as Liberals support the principle that mothers and fathers make their own choices about their family arrangements, child care, work and the balance between those things. We do not believe that the state should make that decision on behalf of parents, particularly when children are young.

Steve Webb: I am happy to respond to that point, because it raises the question of what we do during a recession. The Secretary of State's policies are ratcheting up the coercion on sets of people who are legitimately on benefit, including lone parents and disabled people, increasing the pressure, the threats and the anxiety for that group, at a time when there is huge pressure on jobs. That is the distinction that I would make—the approach of the state. People who are legitimately in receipt of benefits should be entirely welcome to make their own choices and supported by his Department when they make their choice. What I object to is coercion. That is the distinction between us.
	We have heard about the Bill's provisions on the social fund. The Secretary of State says, "We need more legislation to charge interest," but he knows that his own consultation paper envisaged the charging of interest at credit card rates, and he has not ruled it out. He simply said that we would have to legislate further. I am happy to give way for him to say explicitly that if private providers offer these services, they will not be allowed to charge interest.

Steve Webb: That is very good to have on the record. It would be interesting to know why he floated the idea in the first place. One thing that drove me into politics was the Tory Government scrapping single payments for people on benefit and replacing them with loans. The idea that a Labour Government would even float high interest rates for poor people was pretty shocking. I know that the Secretary of State said no, but why did he say yes in the first place? That is what is so worrying. It even became a policy for a weekend, until it was stamped on by an adverse press reaction. We have to make sure that that does not happen, as he says.
	On child support and child maintenance, we had a bizarre exchange about driving licences and passports, as though such sanctions cannot be imposed at present. It does not happen very often, as far as I am aware, but the Government have had the power for many years to take driving licences and passports, so what's new in the Bill? Presumably the fact is that there is a bit of due process to go through and it takes a bit of time, so the Government, in characteristic new Labour fashion, want to sweep away the due process because it gets in the way and slows things down.
	By and large, before the Government get to the point where they threaten a father, typically, with taking away his driving licence or passport, the Child Support Agency or the Child Maintenance Enforcement Commission have been engaging with that person for years. The idea that a few weeks, or however long due process takes, is some insurmountable barrier is absurd.

Steve Webb: And whose fault is it that someone has two national insurance numbers? Which Government administer a system that allows such a thing to happen? The idea that they respond to that by curtailing appeal rights— [Interruption.] Will the hon. Gentleman listen to the response to the question that he asked? He said that the process is slow because of all those appeals. Is he suggesting that appeal rights get in the way? This pesky right of appeal, people's right to appeal to an independent body and challenge what has been done—I do not consider that a problem. People should have a right to legitimate appeal where they can challenge a decision.
	As a constituency MP, the hon. Gentleman knows, as do I, that the CSA makes mistakes. What if the CSA wanted to take his driving licence away, because the person that he just mentioned was using his national insurance number, but he did not get his day in court, because somebody in the CSA, whom he could not speak to, was able to take his driving licence away? What would he do in those circumstances?  [ Interruption. ] The Minister for Pensions and the Ageing Society says that he could appeal and get the decision revoked—after however long that would take. The Government are saying that there is no reason to go through a court, that an official can take driving licences away and that people will be able to appeal, which is presumably akin to a judicial process. So what would we gain? The state would be allowed to take people's driving licences away without going through a court while allowing people to appeal to a tribunal. That would be a really big step forward.
	Will the Secretary of State clarify the position in the European Union on passports? The countries that he has cited where people had their passports taken away, or where they were threatened and then began to contribute to maintenance payments, are outside the EU. Will he clarify whether withdrawing passports would threaten people's freedom of movement within the EU—I wonder whether he has got the legal position on that—or is the policy empty posturing once again, which involves sounding tough but not delivering?
	We will not oppose the Bill tonight, because of the provisions on disabled people. We do not want to stand in the way of the chunk of measures that will enable and empower disabled people. The philosophy, if one can grace the measure with such a term, of coercion, as against support, and making people take up packages—if the packages were any good, people would take them up anyway—is fundamentally coercive and illiberal, and it does not command our support.

Anne McGuire: It is a pleasure to follow the hon. Member for Northavon (Steve Webb). His speech took me back to the philosophy lectures that I used to attend on John Stuart Mill. Today, he has given us a lesson that I can only describe as John Stuart Mill-plus.
	I welcome the Welfare Reform Bill, because it is a further step in the development of a more proactive welfare state—the hon. Member for Northavon calls it coercive; I think that it is proactive—that is more personalised and more supportive of the needs of individuals. At a time when political parties are sometimes accused of converging on some issues, this Bill is a clear indication of the fundamental difference in approach between this Government and the official Opposition.
	The underlying philosophy of this Labour reform is to ensure that our welfare state is responsive to the individual's needs and seeks to help them overcome some of those problems. I congratulate the right hon. Member for Maidenhead (Mrs. May) on making a speech that was full of fine and warm words, but the Opposition still see the welfare state as a problem rather than as a vehicle by which we can support people. If there is any doubt about that, we have only to look at the comments made just before Christmas by the Leader of the Opposition, when he castigated and insulted people on benefits in Britain by asking:
	"How do we stop them turning into Karen Matthews?"
	That attitude still prevails within the Opposition.
	The Bill proposes more support in return for personal responsibility. Although some organisations have raised concerns about elements of the package, they fundamentally agree with the principle of offering more support to those who need it. Since the publication of the Green Paper last year, however, the landscape has changed, and there is an increasing chorus of concern from those who challenge the need for reform at a time of global downturn. We must accept that in times of uncertainty there are those who argue that we should hold on to what we have and not attempt to change. As my hon. Friend the Member for Bradford, North (Mr. Rooney) has indicated, however, we should not accept that view, because it was prevalent in the 1980s and 1990s, when we needed the benefits system to change, but that did not happen, which resulted in the abandonment of millions of people to a life on benefit—frankly, we are still dealing with the legacy of that approach, even in the 21st century.
	Over the course of the progress of this Bill through Parliament, I hope that Ministers will take the opportunity to challenge that somewhat defeatist attitude, which would have the Government make no changes during the current downturn. I hope that they will say to those who promote that approach that they are doing unemployed people and those on other benefits absolutely no favours, if they continue to think that we cannot improve on what we have in place already by introducing the changes in the Bill.
	When people are losing their jobs, surely we should not cut support. Surely it is important to invest in people and not to talk about real cuts in the DWP budget, which the Tories would make—their idea of reform of the welfare state is now, as it has always been, about salami-slicing benefits and reducing investment in training and other support. I welcome the additional investment to ensure that people return to work as quickly as possible, particularly if they have been out of work for more than six months.
	I want to raise three specific points in the short time available to me. In principle, the inclusion in the Bill of joint registration of birth is a laudable aim and one that recognises, as my right hon. Friend the Secretary of State has highlighted, the responsibility of two parents. I know that many fathers' groups, which sometimes feel that fathers are marginalised, welcome it, but I want the Minister who is winding up the debate to consider the "what if" questions. What if the mother does not want to or cannot declare who the father is and is not in one of the excluded categories? What if she identifies a man who says that he is not the father and he refuses to take a paternity test? Who will be responsible for chasing that? Will it be the registrar or the DWP? What will happen on day 42 if there is no resolution and the deadline for registration has been reached? Will child benefit still be paid, and will the child trust fund still be activated? Will the child still be registered, even if the mother is the only parent who appears on the birth certificate? The principle is sound, but I am not yet convinced that the implementation will be as straightforward as it might appear to be.

Anne McGuire: I should explain what a Clyde supporter is, in case anybody thinks that it has something to do with the river. Clyde is a football club in the town where I live. I make that clear for the record in case hon. Members think that the hon. Member for Glasgow, East (John Mason) and I are somehow associated in some secret society. I say to the hon. Gentleman that the comments and criticisms that I have made this afternoon about the SNP Government have not come only from me; they are highlighted in today's  The Scotsman by Professor Neil McKeganey, the director of the Centre for Drug Misuse. He discusses the claims that the SNP is not participating in this piece of work. In his column, the professor writes:
	"I do think it is questionable whether we should be giving addicts cash benefits in the same way that we do to other vulnerable people."
	He goes on: "I think that"— [Interruption.] Will the hon. Member for Na h-Eileanan an Iar (Mr. MacNeil) let me finish? The professor goes on:
	"I think that the Nationalist government should be putting more money into rehabilitation. At the moment there is evidence that there are existing rehab units with empty beds and insufficient places on rehab programmes, and yet the government just seems to be putting more money into the methadone programme."
	Those are not my words, but those of the director of the Centre for Drug Misuse in Scotland. I hope that SNP Members here today will press their colleagues in Scotland to participate in what is recognised as an important way to support drug addicts who want to get off drugs, but might have never had a vehicle for doing so. I also hope that our Department for Work and Pensions will not give up on the SNP Administration, although that might be tempting. I hope that the Department will continue to encourage the SNP to look again at these proposals.
	Finally, I congratulate the Secretary of State on recognising the importance of access to work, on the extra funding that he has put into the budget and on embracing the right-to-control agenda. The plans in the Bill move us a significant way forward in transforming the lives of disabled people, ensuring that they can make decisions about their own lives. I wish that the hon. Member for Northavon could conceive of a situation in which 20 people could make individual decisions to come together to buy in the services and all the attractions that he identified in his local residential home.
	The right to control will be a long-lasting legacy to those disabled people, such as Baroness Jane Campbell and Rachel Hurst, among others, who fought for so long for real equality in our society and it will be another step forward towards ensuring that this country will improve disabled people's lives and reach true equality, as highlighted in the then Prime Minister's 2005 strategy unit report. Yes, there are some detailed issues, and I am sure that we will work them out during the progress of the Bill. However, I hope that the House will unanimously support the Bill, because it is another significant step in transforming our welfare state.

Charles Walker: Thank you, Madam Deputy Speaker, for calling me to speak so early in this debate. I am a little surprised, but this is a very welcome early opportunity.
	First, I congratulate the Government on their direction of travel. This is a fairly brave Bill, and I congratulate them on introducing it. There are, of course, areas of reservation, which will be explored in Committee and on Report. However, I believe that we live in a humane and civilised society, and such a society tries to lock people into the world of work, not exclude them from it. If the Bill's direction of travel is to bring people into work and help them gain sustainable employment, I definitely welcome it.
	It is important to remember that work socialises people. We spend a lot of time in this place talking about income—allowing people to earn money and move off benefits. That, of course, is hugely important because it gives people their self-respect and often allows them to move out of poverty. But we must not overlook or forget the other hugely important aspects of work. Nothing is more depressing than sitting at home and looking at four walls day after day, completely removed from the world outside. The great thing about work is that it involves going out and meeting people. People work in teams and create and generate new friends and relationships; whole new vistas open up. That is hugely important. We must look at work as a way of not only helping people get an income and move off benefits, but of improving their quality of life, long-term prospects and long-term mental health and well-being.
	The Bill has perhaps come at the wrong stage of the economic cycle. It would have been better if it had come a few years earlier; as we have seen today, we face a huge wave of redundancies across the economy. That, of course, is not welcome but it is a reality of the recession that we are in. I am concerned that at a time when we want to help people to re-enter and re-engage with the labour market, there will not be the jobs for them to take. However, as hon. Labour Members have said, that is no excuse for inaction. In the months and years ahead, we must work with people to prepare them to re-enter the labour market. Furthermore, there is fluidity in the labour market even in a recession. Opportunities will open up for the long-term unemployed to move back into work, and we should look for those opportunities wherever we can find them.
	There is also a huge job to be done with employers. We need employers to start valuing people with disabilities. Sympathy will go only so far; it does not put food on people's tables and does not bring them back into the work force. People with disabilities do not need to be patronised by us—they need to be promoted and helped by us. They need a hand up. They need us to work with them to put them back into meaningful jobs that help them to fulfil their desires and abilities. That is the sea change that we in this place need to promote in the labour market. We have to stop simply being sympathetic and tut-tutting. We have to move the issue forward, find opportunities and get back into work people who have so much to contribute to the world of work, our society and our communities.
	I want to sound one note of criticism of the Government, but I really do not mean this in a partisan way. One of the great sadnesses of the past 10 years has been the so-called skill shortages. Actually, what we have often had is a shortage of personnel to fill jobs. We have been lucky that many motivated immigrants have wanted to come to this country and fill those positions. By and large, they have made a huge contribution to our society and its wealth, and we have been very lucky to have them. I cast no aspersion on those who want to come to this country to better themselves and their families. However, such people have come here at a time when many people born and raised in this country have been sitting outside the labour market and have been removed far from it. Perhaps we should have spent more time working with the excluded to get them back into work.
	A life on benefits cannot be the life that most people want to lead. That point has been made by Labour Members, and I am sure that it will be made eloquently by Opposition Members. When Beveridge invented the welfare state, of which we can all be proud, I am sure that he did not believe that it would be a long-term solution and that people would have the option of spending their lives on benefit. I am sure that if he were here today, he would see that as some sort of prison—as trapping people in a benefits system that did not provide them with a way out to making a full contribution to the society around them. There are oft-used clichés— benefits are here to provide "a leg up", "a safety net" or a "ladder out of poverty". We need to focus on that in this place.
	I am well aware that there is a group of people who, for whatever reason, will never, ever escape from the benefits system. Perhaps they are too ill to find work, or their family is too large, or their care responsibilities are too great. We must never despise those people, because, as Labour Members have pointed out, a whole range of circumstances stops people entering the labour market. We are a civilised society, and we care for people, but part of that care must be taking people who want to escape from benefits out of benefits and placing them back into the jobs market.
	Many Members want to speak, so I will cut my remarks short. The Government should be congratulated on their direction of travel. Many complexities in the benefits system need to be removed or resolved. Members in all parts of the House have an obligation to sit down with the Government in Committee and make this Bill the best Bill that it can possibly be. Many people out there are relying on us to give them the help that they so desperately crave.

Anne Begg: Because the same is true for lone parents as for disabled people. The hon. Gentleman must have spoken to disabled people who say, "I needed that extra push." I know that from my own experience of someone who had been on incapacity benefit for 10 years because of a mental health problem. When she got the first letter, before there was any kind of obligation, it went into a drawer. The next letter came in and went into the drawer as well. It took a huge effort for that individual eventually to make it over the threshold. This is part of the Government's drive to ensure that they take that step. That is true of those on incapacity benefit and true of many lone parents. It is a bit more than just saying "Here's a chance, why don't you take it?", which is what education or information would do; it is saying, "This is so important that the Government put this amount of store by it, because we think it will make your life better." Simply telling people that on a piece of paper is not enough, and it is important to offer them the opportunity to sit down face to face with a highly qualified person. I take the point made by my hon. Friend the Member for Bradford, North (Mr. Rooney), the Chairman of the Work and Pensions Committee, that the quality of the personal advisers is important, so that they can sit people down and transform their lives.
	If we are to get lone parents back into work, we must ensure that they feel confident about their child care arrangements. That is crucial in giving them confidence that their children will be safe. For many lone parents, such confidence can come through a grandparent. I do not suggest paying grandparents any kind of wage, but if the Government could assure them that they would not lose out on their state pension contributions by giving up some of their working life to look after their grandchildren, they would be much more willing to provide unpaid child care. The mother would have confidence in that care, and the state would get a return on it. That could be done at a pretty small cost to the state, and would encourage grandparents to become involved. It would be good for the grandparents, too. Not only would they not have to give up work entirely, but they would be able to go down to part-time work without fearing that it would interfere with their national insurance and state pension contributions.
	I hope that the Government will consider those two proposals, which would improve the Bill. National insurance credits for grandparents, in particular, would give lone parents confidence that they had the back-stop of a good-quality childminder in whom they had confidence. That would make them more likely to be well disposed to the other things that the Government are to offer lone parents, such as training, getting work-ready and getting into work.
	If the Bill is about anything, it should be about empowering disabled people by giving them individual control of their budget and empowering lone parents to get into work and provide the best possible life for their children. It should be about empowering people who were written off by previous Governments and left on the sidelines. They have been considered too difficult, and particularly in times of economic downturn it has been said, "Well, we needn't bother with them because they're too difficult. We'll just deal with the easy ones". They deserve a lot more than that from this Government, so I welcome the Bill and I am glad that it will be given its Second Reading tonight.

Frank Field: I am arguing my case for the very reasons that my hon. Friend outlined; the continuation of existing policies will lead to the apartheid that she mentioned. That takes me to my first substantive point.
	Let us consider the record of the new deal and making work pay. In doing so, let us record that we spent £75,000 million of taxpayers' money to finance those schemes. Let me remind the House of some of the success figures. Being in work for 13 weeks —permanent employment—is one. We do not collect data after that. Many hon. Friends with marginal seats would not perceive 13 weeks as permanent employment, but perhaps more of that on another day.
	I want to concentrate on the new deal for young people. When the scheme began, half of those on it went into a job for 13 weeks or more. Now, two thirds fail to do that. An escalating number of young people are just retreads on the schemes, participating for the second, third or fourth time, or many more. A quarter of those on the new deal for 25-plus people leave benefit, but then go on to incapacity benefit, and 0.3 per cent. of those on the new deal for 50-plus manage to get a job for 13 weeks or more.
	Given that we are now leaving the world of rapidly expanding job markets, and will sadly experience surging unemployment, I make two pleas to the Government. I would like them to say for how long we will continue with the schemes, with declining success. At what point do we pull the plug and realise that we could spend the money more effectively?
	The first reform I would like is for young people in my constituency and others, whom we have failed through our education system. Some can hardly put a sentence together after 13 years of public investment in their skills and employability. Many have not worked since leaving school. Of course, they left school early because it was so boring and irrelevant to them. I would like us to begin to use the money that we are currently wasting on many of them to establish the one job creation success of the previous Labour Government—the community programme. There should be real jobs for young people. It is not acceptable to allow them to go through the years after school never working. We need more direct intervention. I am asking not for more money to be spent, but for it to be spent differently. We should concentrate our efforts on that group.
	I hope that my right hon. Friend the Secretary of State has understood the nuances of Labour Members' concern about single parents. I appreciate that it looks good on a press release—the spin is good—when we say that we are going to rough up some more single parents to get them back to work, but unlike the group I have been discussing, they have a job to get on with. The unemployment figures since the downturn started show that women have been losing jobs at twice the rate of men. It will be much more difficult for single mothers to gain jobs in the new world into which we are entering. Of course, I accept the point that my right hon. Friend the Member for Stirling (Mrs. McGuire) expressed so well: everybody must be in favour of single mothers maintaining, whenever possible, contact with the labour market. However, if we are considering sanctions, surely they should be linked to those who do not have family responsibilities, who have never worked and for whom we should provide an actual job. My first plea for reform is therefore to make the Bill relevant to those people.
	My second plea is for our many constituents who have worked for 10, 20 and 30 years and will sadly be made unemployed. They will get the shock of their lives when they sign on for their national insurance benefit and find how pitiful the sum is. Instead of continuing to waste money on cutting VAT, we should use it to double JSA national insurance benefit for those who have had, for example, five years' continuous employment. For those who have worked for 10 or more years, we should pay triple the rate. We know that those people will move back to work as soon as they can. Surely our system should provide them with a much better income than they currently get from an immaculate contribution record.

Frank Field: I did not want to embarrass the Government by telling them what JSA national insurance benefit is. Not even tripling it will prevent the people whom I mentioned from going back to work. Work is in their DNA—they will move from unemployment as soon as they can. There is no question of their hanging around.
	I am sure that amendments will be tabled on Report about putting fathers' names on birth certificates. The Secretary of State said that the scheme would not change, so nothing much will happen. However, I believe that we must devise some mechanism whereby children who want to find out the identity of both parents can trace them at some stage. Surely it is not impossible to ask for that information without a Chinese wall. Why do we assume that we must make males put their names on birth certificates? There are some males who wish to put their names on birth certificates and are prevented from doing so. On Report, I hope that the Government will provide a more flexible response.
	I shall end as I began, by saying that the Bill, which was drafted in an age of an ever-expanding job market, is no longer relevant in the economic hurricane that is beginning to affect our constituents. We shall need to reshape it radically if we are to serve the needs of our constituents. Sadly, I believe that, before it is even given Royal Assent, many more people in the country will be saying exactly the same thing.

John Mason: I am tempted to use the first part of my speech to defend accountants, as they got a raw deal earlier. However, I suppose that there are good accountants and bad accountants.
	There are parts of the Bill that we are happy to welcome. For example, the power to pay pension credit automatically is positive, because we know that between a quarter and a third of pensioners do not claim their entitlements, and that that has been the case for a number of years. We also agree in principle that we want to encourage people to work. Not only does that increase their income and the wealth of the whole economy; it improves folks' health and well-being, as they feel that they are really contributing to society. We want children to grow up in households where the parents are working. We want to break the cycle in which members of the new generation have never seen their parents work. I believe that the majority of claimants want to get to work.
	During the recess, I spent a morning in a Jobcentre Plus in my constituency. I sat in on a couple of interviews, and I saw folk who were really desperate to get back to work. The question that has just been asked, however, is: are the jobs actually out there? This seems a strange time to introduce this legislation. It might have worked two years ago, but this is surely the wrong time for it. Surely the Government have some responsibility to provide jobs. Can the Secretary of State assure us that jobs will be available when these people want them? Perhaps it would have been better for the £12 billion that was spent on the VAT cut to go into construction and into creating new jobs.
	There is a fear that the Bill will remove the welfare safety net. Conditionality is an interesting word. It sounds okay on the surface, but what does it actually mean underneath? Does it mean that people will have to fulfil certain conditions in order to have the right to eat and to live? If people are on an income that is above the minimum, we could make that extra bit conditional. Surely, however, in a civilised society, we cannot make the minimum conditional.
	My particular concern is for children and older people in the system. I have already asked Ministers whether they agree with Barnardo's hope that dependent children will be taken into account before sanctions are enforced. Figures from the United States suggest that, when sanctions have been imposed, 60 per cent. of the children involved are at a higher risk of being underweight. And what about those at the other end of the age range? Unemployment among the over-50s is rising twice as fast as in other age groups, and unemployed men over 50 have only a one in five chance of being in a job in two years' time. Is it right to put pressure on that group as well?
	How about having a few more conditional carrots, instead of just conditional sticks? For example, is the minimum wage high enough? Surely the real incentive to get people back into work is the knowledge that they will earn a living wage when they get there. I really must question how we can consider welfare reform without looking at the minimum wage at the same time.

John Mason: I should like to turn to some of the specific issues in the Bill. There seems to be an assumption that all parents should be working. It has already been pointed out that many families are facing a lot of problems these days. For example, some children with physical disabilities, who might not even have survived in past, need a huge amount of care. Sometimes, having a parent at home is the right thing for those kids.
	Another group that has been mentioned is drug addicts. If we cut their benefits, what will be the result for their children? Would it mean less food on the table for them? That is what happens in practice.

John Mason: That is a good point. A lot of well-intentioned statements are being made here tonight by a lot of people, and I include the Ministers, many of whom are well intentioned. The problem comes when that works its way through to the actual job centre—if it does so—where the same well-intentioned helpfulness, including training and all the rest of it, is not always as evident as in the House.
	Mental health issues are also important. Having opened an office on a main street in my constituency, I find that many people come to see me, and it is clear that a number of them have mental health issues. I am concerned about the pressure that may be put on them if they are subjected to a very rigorous regime.
	In conclusion, I promised my constituents that I would judge issues at Westminster by how they affected the gap between the rich and the poor in society. Now we are entering a recession, yet we see top bankers, who have virtually destroyed their banks and half the economy of this country—[Hon. Members: "The Royal Bank of Scotland."] I include Scottish banks. Those bankers are walking away with knighthoods and handsome pensions, and are perhaps even getting other good jobs as well. By contrast, we see people at the bottom of our society being squeezed more and more. I just think that there is something wrong with that.

Roger Berry: I think that the objectives of welfare reform have to be to free more people from poverty, to provide more support to get people into employment and to give disabled people the kind of choice and control over their lives that non-disabled people have. I support the Bill because I believe that it will move us further in the right direction in all three respects.
	I do not believe that this Bill provides a solution to the global economic crisis, nor do I believe that it will create the extra millions of jobs that are needed pretty quickly in this country. That is a matter for fiscal policy—I hope that more of that will be done in the near future—and for co-ordination internationally. The idea that there is some kind of choice between welfare reform on the one hand and policies to stimulate the economy on the other is wrong. The act of shifting money from one budget head to another will not on its own increase demand and will not of itself boost the economy.

Roger Berry: If I understand the comment correctly, I think the hon. Gentleman was suggesting that disabled people out of work are less likely to— [Interruption.] Oh, I thought that the hon. Gentleman was saying the opposite, which is why I was expressing a slight surprise.
	One of the key reasons why so many disabled people live in poverty is, as we all know, that only 50 per cent. of working age disabled people are actually in work. If we consider people with mental health problems or learning disabilities, we are down to less than 20 per cent. It must be right to take measures to help disabled people to secure better employment opportunities. That is partly what the new deal, Jobcentre Plus, pathways to work and, of course, a decent national minimum wage were all about. They were about providing employment opportunities to enable people to get out of poverty.
	I should add that for those who are unable to secure employment—here I agree with my right hon. Friend the Member for Birkenhead (Mr. Field)—social security benefits are simply too low. There is no third way for most people: if they do not have a job, they rely on benefits, and benefits in this country are too low. The TUC and others are absolutely right to say so.
	To return to the employment front, 10 per cent. more disabled people are in work today than there were 10 years ago, which is significant. For some, progress has been painfully slow, but there has been a significant overall improvement in employment opportunities. Those who have had the most difficulty securing employment are probably those with mental health problems. About half of people on incapacity benefit have a primary diagnosis of a mental health problem and if we add those with a secondary diagnosis, it is even more. Such people with mental health problems need the kind of personalised support envisaged in the Bill, which has been piloted for some time. The provision of such personalised support is one reason why I support the Bill. The vision of specialist personalised support is crucial.
	Part 2, which relates to giving disabled people greater choice and control over the services provided to them, provides another crucial ingredient of support—the so-called "right to control". The problem, of course, is that services are currently fragmented beyond measure. Some people in the House know this better than I do from their personal experience, but countless assessments—well, not countless, but people could easily have six or seven of them—different eligibility criteria, the Employment Service, social care and health care do not offer a good example of joined-up service provision. In fact, they provide a terrible example because they are not joined up at all.
	I thus strongly support the Bill's identification of the need for disabled people to have right of control in the sense of bringing those services together. When the noble Lord Ashley put forward his Independent Living Bill in the other place, he envisaged one gateway and one budget over which disabled people could exercise control, thus eradicating the problem that arises when people have to negotiate such a fragmented range of services.
	In that context, I am disappointed that although the Bill talks about the "right to control"—and the Government have used the phrase quite a lot in respect of it—it specifically excludes services relating to social care and health. I find that strange. If we are to talk seriously about the right to control, it must embrace within that framework not just employment-related services, but social care, health and other services. I would like a clear statement from the Minister this evening that the Government intend to legislate for right to control in respect of social care and health care, as well as for employment-related services.
	As I have argued in previous debates, fragmentation is evident not just in different kinds of service provision; the classic problem remains that someone who has a health care package in one local authority but wants to work in the next door authority has to take the risk of abandoning the current care support package and then spend considerable time renegotiating a new package with the neighbouring local authority. If the right to control is to be more than rhetoric—if it is to be an essential part of enabling disabled people to secure decent employment opportunities—it must include the right to move from A to B to obtain work. Our present social care system blocks that. I hope that the Minister who winds up will confirm, very simply, that "right to control" means that the Government will scrap the lack of portable support, and get rid of the present ridiculous system whereby people cannot take their care packages from one local authority to another.
	Welfare reform plainly requires a major expansion of employment services. I welcome the news that funding for Access to Work is to be doubled by 2013, but I confess that because of the modest amount involved, and because every £1 million spent between £1.7 million and £1.9 million is returned to the Treasury, I still do not understand why it is necessary to wait until 2013 for that to happen. It seems to me that the Government's aspirations are very modest. What is needed, I feel, is a massive awareness campaign to inform the many employers who do not know about Access to Work—and, perhaps, even disabled people who do not know how wonderful Access to Work can be—that it is available.
	I strongly support the statements made by three Members about the barrier to work, and to other aspects of life, that affects blind people. It is nonsensical that blind people cannot access the higher mobility rate of disability living allowance. What is the distinction between someone who physically cannot move around unaided and someone who is unable to move around safely owing to sight loss? In both cases, the outcome is exactly the same.
	I know that the Under-Secretary of State for Work and Pensions, the hon. Member for Chatham and Aylesford (Jonathan Shaw)—who is present, and who is Minister for disabled people—is very sympathetic to that argument, because I have heard him advance it. I note that the Secretary of State is very sympathetic to it as well. In my view, £45 million to enable 22,000 people suffering from serious sight loss to travel to job interviews, travel to work, participate as equal members of society and, dare I say, have some right of control over their lives is not an enormous price to pay, especially nowadays. I urge the Government—please, please, please—to accept the logic that blind people should have access to the higher rate of the mobility component of disability living allowance if they meet the relevant criteria.
	My final point relates to the role of the voluntary and private sectors as providers. Not much has been said about that so far. I believe that the employment service should be the best possible for the individual. I do not particularly care who provides it. I know of voluntary sector providers—and some in the private sector—who do a fantastic job, and I have no problem with that. However, as the Minister will know, many organisations argue that awarding larger and fewer contracts to non-specialist providers is, in Mencap's words,
	"squeezing expert, niche providers out of the tendering process".
	Payment by results might also mean that those who received the support were those nearest to the labour market.
	I look forward to receiving assurances from the Minister on both those issues.

Peter Bone: It is a great honour to follow the hon. Member for Kingswood (Roger Berry). He is always worth listening to, but he was particularly worth listening to tonight. I am sorry that he was unable to continue longer because of the time limit. I agreed with him about the desperate need to examine the issue of social care packages, and I also agreed with what he said about the treatment of blind people.
	It was also a great pleasure to follow the hon. Member for Glasgow, East (John Mason) and the right hon. Member for Birkenhead (Mr. Field). They, too, made powerful speeches. It is a shame, in my view, that the right hon. Member for Birkenhead does not sit on the Government Front Bench: I think that he would be a great asset to the country, given his radical views and ideas. I agree with him that the Bill was drawn up at a time when things were very different. I am sure the Prime Minister genuinely believed that the boom would go on for ever—he always said that it would go on, and there would not be a bust—but I am afraid that he was totally wrong, and that we may now face not a recession but a depression.
	Because I find the whole issue of welfare reform very difficult to deal with, my speech will cover a number of issues that will not necessarily be "joined up", and I apologise to the House for that. One issue arises in my constituency time and time again. I do not want to use the word "underclass", but there is a class of constituents who know nothing other than being on benefits. They do not relate to jobs. I am sure that the thrust behind the Government's proposals will be very useful in helping them to break that cycle, I know that the devil is in the detail, and no doubt there will be plenty for us to examine in Committee. If we could only break the cycle and get those people into employment, that would surely be a very good thing, and I hope that the Bill will help us to achieve it.
	There has been mention of people being interviewed again and again about incapacity benefit. I met a charming gentleman—along with his wife and daughters, who were his carers—who was permanently bedridden. There was no chance of his being able to get out of bed, yet he has been asked for the second time to undergo an interview to establish whether he is entitled to incapacity benefit. That cannot be right, and it is a waste of everyone's time and money. However, there are clearly people receiving incapacity benefit who should cease to receive it because they should not be receiving it in the first place.
	I am not sure whether there is a one-stop solution that fits all those cases, and I find this a difficult issue. However, I believe that we are now living in a different age—an age in which unemployment will go up and up. Whatever the Government do at this stage and regardless of whether they succeed, unemployment will increase significantly over the next few months. We are slightly ahead of the game in Wellingborough, because our unemployment has been much higher for a considerable time. We now have 56.3 per cent. more people unemployed than in 1997, and unemployment has increased by more than 80 per cent. in the last year. I am not making a party-political point; I am merely saying that I think the position in my constituency is different from the position in many others.
	We are faced with the fact that, whatever welfare reform we bring about and however well we prepare people who are currently not in work and are receiving incapacity benefit, the jobs for which we prepare those people will simply not be there. If I advertised a job at the moment, there might be a couple of hundred applicants. Would I take on someone who had been unemployed for a number of years, had been on incapacity benefit and had been retrained, or someone who was experienced and had only just left the workplace? Any employer—and I would not blame him—would take on the person who had just left work and had the experience. That is a serious problem about which the right hon. Member for Birkenhead made some interesting points. I hope that they can be discussed in Committee, because the issue concerns me.
	One of the aspects of welfare reform that we should be considering is the need to maintain people in jobs if that is at all possible. There is an unusual, although not unique, situation in my constituency, which contains a well-established boot and shoe company that has been in the family for more than a hundred years. It is highly respected, and its employees have worked for it for many years. In the current recession, it has run into serious problems and has had to cut its work force by a third, which has meant laying off 40 people. Some of those employees might have been employed for up to 30 years and are entitled to significant redundancy money, but the company cannot pay it because of the reasons it had to lay the staff off in the first place. If it were to try to pay the redundancy money, the company would put itself into administration; it could not carry on trading and the other 80 jobs would be lost.
	I have brought this case up in the House and Ministers have been helpful, but this case goes back to mid-December. These 40 people still do not have their redundancy money. The company is still trading and we hope it will trade out of its present situation. I understand that the Insolvency Service could provide the money to the employees and then get the money back from the company over a period of time as it traded out of its difficulties. The problem is that the company, as can be imagined, is under enormous pressure. The directors are working exceptionally hard to keep it going. The Insolvency Service would like to help but, unfortunately and unbelievably, the rules say that it cannot approach the company and must wait for an approach from the company. That sort of red tape needs to be looked at.
	That sort of help in terms of welfare reform would allow the employees to get the money to which they are entitled and allow the company to continue to trade. After all, the Government would not be losing any money by doing that. If the company went into liquidation, the Government would have to pay anyway. I know that that case is slightly removed from the terms of the Bill, but I wanted to raise it.

Sammy Wilson: I understand the point about the economic context in which the Bill is now placed—it is different from when the Bill was originally thought out—but does the hon. Gentleman accept that the principles behind it, namely that to try to get those who are unemployed, regardless of the economic circumstances, into a mind frame where they can prepare themselves for job opportunities that may become available, and can look at their needs and their skills and then move forward, however tentatively, towards employment are the right way forward?

Peter Bone: As usual, I agree entirely with the hon. Gentleman. That is the advantage of what the Government are doing and the hon. Member for Aberdeen, South (Miss Begg) made that point very well.
	I appreciate that there are others who want to speak, but I shall finish with this point. I know that the devil is in the detail and I may be getting this totally wrong, but it would be fundamentally wrong if lone parents with a child as young as one were forced back into the workplace.  [ Interruption. ] I see heads shaking behind the Minister, but I am concerned that that is a possibility under the Bill. I know that this will be dealt with in Committee, but Members on neither side of the House should try to make lone parents into a sort of easy headline. That may not be what the Government intend, but that needs to be clarified.
	I appreciate that the Secretary of State has been bold in what he is trying to do. I am not entirely sure that everything in the Bill is right, but I am leaning towards supporting the Government, despite what the right hon. Member for Birkenhead said. However, we must reserve the right to look at the details before reaching a final decision.

James Plaskitt: I certainly welcome and support the Bill, which is timely and contains a wide variety of important measures to improve the welfare system. I am quite familiar with many of them, for reasons that my right hon. Friend the Minister will know.
	I want to confine my remarks to the sections of the Bill that deal with reforms of the social fund. I welcome the proposal in the Bill so far as it goes, namely to forge something of an alliance between the budgeting loan part of the social fund and credit unions. But I want to suggest that the social fund needs a much more radical reform than that. Over the last few years, we have made some useful, but I think rather minor, improvements to the social fund. If that sounds like a criticism from an ex-Minister, let me say that the criticism is aimed at myself. I feel that I did not make as much progress in reforming the social fund as I wanted while it was my responsibility. I take on that criticism personally. But I hope that now it has been included in the Bill—I am pleased that it has—the Government will consider going further.
	We know the problems with the social fund. They are now widely known. Citizens advice bureaux constantly remind us that the social fund suffers from underfunding and that there is an element of a postcode lottery, and even a calendar lottery. I would certainly confirm all those criticisms. As a Minister, I often found that, part of the way through the financial year, details of the allocations of the social fund in different regions would come back on to my desk for me to alter to make sure that the target was met by the end of the year because some areas were spending above trajectory and some below. We had to keep shuffling the figures around, which was crazy. It meant that there was no predictability in certain areas as to how the social fund was going.
	The social fund is also not used properly by some of the claimants. It is an unfortunate fact that some tend to use the opportunity to access budget loans as a kind of revolving door and keep coming back for more loans, whereas others desperately need a budgeting loan and simply cannot get it. The Treasury Committee and the Work and Pensions Committees have urged us to do more and we should take this opportunity to heed what they are saying. The problem with the social fund is that it is wholly passive; it does not give us any of the additional engagement with clients that we need if this is to be part of an active welfare state, as we would want it to be.
	I welcome the tie-up with the credit unions. The credit union movement is growing thanks to investment from the Government through the growth fund and to rule changes in the common bond, but let us bear in mind that the credit union movement in this country is geographically incomplete. There are great swathes of the country that simply do not have credit unions and many of those that do exist are quite fragile and are run by volunteers who keep them operating, just. At the moment, credit unions serve just 1.5 per cent. of the population. We cannot look to credit unions as a vehicle by which to deliver radical reform of the social fund.
	The social fund needs to be recapitalised. We have heard this in respect of the banks but it is actually the problem with the budgeting loan part of the social fund, which is undercapitalised. It has about £500 million revolving around it, paid out and coming back in as repayments from those who have got a loan. It supports about 1 million loans a year. But that level of funding simply is not enough. I urge the Government to blow the dust of KPMG's feasibility study from last year which examines—I think interestingly—the possibility of a public-private partnership to expand the social fund by bringing in some private capital. The report concluded that at that time there was little appetite among the private-sector banks for lending to what they referred to as the deep sub-prime sector. There is an irony in that, as the banks did that on a gigantic scale for many years and said it was exactly the right thing to do. They gambled working people's money on that, and they are now being bailed out with more money from working people, and in a way that I think will pitch even more people into financial exclusion. In these circumstances, the least they can do is reconsider the possibility of giving some capital support to a joint private-public budgeting loans scheme.
	The banks might say to us—I had conversations with them on these matters when I was exploring the idea—that the loans are pretty risky. I point out to them that the level of default on budget loan repayment is very low and that this is nothing like as risky as the activity the banks themselves have been engaging in for a number of years. The banks might also say—they said this to me—that it is too costly and ask, "Exactly how much do you want to put into this recapitalised amount?" I think the level of recapitalisation needed is such that it would increase the pool of money in the budgeting loan fund about fivefold. Therefore, we would be looking at about £2.5 billion of private capital to be put into the pot in order to meet the demand. Is £2.5 billion too much to ask the banks to put into such a joint venture? Well, we should set that question against the fact that last year alone—which was not a good year for the banks—they managed to find £3.6 billion in bonus payments. The amount of capital I would look for from the private sector is, therefore, less than it is prepared to pay out in bonuses. If a £3.6 billion reward for incompetence can be afforded, resources for financial inclusion of £2.5 billion can also be afforded. I also think that the vast majority of people who take out a budgeting loan have a better sense of fiscal responsibility than many of the bankers who have driven massive financial institutions into the ground.
	Just before Christmas, the Government had a spot of difficulty with this proposal because the idea got out that it would mean the introduction of interest payments on loans offered under the revised budgeting loans fund. May I suggest to the Government the scheme we should be thinking about, which completely avoids that problem? An applicant would come forward in exactly the same way as now, through Jobcentre Plus, and they would be referred to the fund for a loan, but they would then open an account with the fund, so that they would register with it and a relationship would be built between the applicant and the social fund. They would then have access to a certain amount of money from the social fund interest free. That sum might be capped at a certain amount per year; it might be enough to facilitate three, or possibly four, budgeting loans during the year—sums of £1,500 or £2,000, perhaps, although this issue would need a little more exploration. Beyond that, they would also have access to money advice, which is not part of the budgeting loans scheme at all at present, and beyond that, under the joint scheme I am proposing, they would have access to affordable credit above and beyond the amount that is interest free, and that would be drawn from the capital put in by the private sector, and should probably be charged at interest rates of about 1 to 2 per cent. per month. This proposal, therefore, retains the interest-free loan facility, but also allows access to affordable credit.
	Why is it important to do that? Because we have to close the debt trap that many of the customers of the budgeting loan fall into. If they cannot get a budgeting loan, for the earlier reasons I mentioned, where do they go? They go to doorstep lenders—and they might go to legal doorstep lenders who are charging 170 per cent. interest, or others charging about 300 per cent. or to those at the margins of legality charging 1,000 per cent. or more. It is to avoid people having to go to such lengths and falling into a perpetual debt trap as a result that I would like to see this facility built in under a private-public partnership, to allow a universal access to low-cost credit in a way that the credit unions cannot provide because they are not yet universal in provision. If we had this sort of scheme, we could link it into other things that are happening, such as the advice from a personal job adviser. It could also be part of the work readiness preparation or be linked to the savings gateway.
	This is a more radical approach to resolving the problems with the budgeting loans. I urge the Government to take the opportunity presented by the Bill and agree to amendments, which I hope they will consider, to take the powers to do this. That would at least provide an opportunity to pursue it at some point in the future. I ask the Government to consider that.

Dai Davies: I support the principle and aims of this Bill. I hope it will be a Bill to enable employment, and not be a barrier to those who need benefit and help. That is most important.
	I wish to begin by echoing some of the sentiments of the right hon. Member for Birkenhead (Mr. Field) on the timing. I suppose that there is no right or wrong time, but as I represent a constituency with one of the highest incapacity rates in the country, I am concerned that all this will happen at a time when it is very difficult to get people into employment. The statistics for December for Blaenau Gwent were that 2,638 people were out of work claiming jobseeker's allowance and 6,560 were on incapacity benefit, while there were only 218 listed job vacancies. Therefore, although taking people off incapacity benefit and getting them into work is the right principle, it is not an easy task.
	One of the measures we must look at is flexible working. We have talked today about the employment bracket as a whole, but there is opportunity through shared work and shared hours to open it up for those on benefit and the disabled. It must not be employment at any cost, however, or training for training's sake. We have a scheme in my borough called job match, which looks at the requirements of the borough and those of the individual. We need to match their skills with real employment.
	Some years ago, we had schemes in which people shared employment, but on different rates of pay. Another worry I have is that if we put people into employment on benefit rates working alongside someone on a higher rate, that will cause huge problems. The gap between earnings and jobseeker's allowance is significant, and that should be reviewed, as the TUC has requested.
	Another major concern at a time when so many people are losing their jobs is mental health. When we talk about mental health, we forget about conditions such as stress, depression and anxiety—conditions we cannot see or put a plaster on, but which are extremely important. We have heard again tonight about how we will help people into employment, and support is critical. The worry I have is that the support services are not readily available. We have seen funding withdrawn from many services and social services in the borough council, and we have also recently seen the threat to Remploy, which could play a huge part in helping people into real employment—not to stay within the Remploy circuit, but to go out into the jobs market. We need support for counselling services. Those who suffer from mental health conditions need a lot of support, and that must be funded.
	Another worry I have mentioned many times in the House is to do with the medical board that people are called in front of. It cannot be target driven. If the board is given targets to hit, the wrong people will be put into a very dangerous position. Things must be done correctly and each case must be dealt with on its merits. Who are the experts in the relevant field? Do those on that board offering medical opinions know everything—are they mental health experts, or physical health experts? They need to take advice before they make decisions, and perhaps even consider speaking to GPs and specialists, because we will have constituents who want to appeal against a decision, and their GP supports them but the board says they are fit for work. We have real problems in this area. If there is a conflict between the two, where does the appeal go? If it stays at that board level, that is not the answer.
	I asked a question in the House some weeks ago about a guarantee of payment because of the worries about what might happen as people move from one benefit to another, and whether there would be any loss of that benefit value. Other benefits, such as housing benefit and things that people can claim through borough councils, fall into that category, so we need to ensure that the value of money received by the individual is not reduced.
	The drugs problem has been mentioned, and I was pleased to hear the Secretary of State say that it does not include people who are having problems with prescription drugs, tranquilizers or even alcohol. Again, support services need to be provided for those individuals. It is not good enough just to say, "Well, they can continue on benefit." They need the same help as those who are on the harder drugs. We must remember that many individuals on harder drugs also are ready to come off them—they just need the support to do so—so to punish them further or to punish their families would not help in any way. Each case must be considered with compassion and on its merits.
	We have heard a lot about single parents tonight, but carers fall into the same bracket; this is a huge area where a lot of employment could be created. We need to consider equal parenting and equal responsibility. We tend to blame one side or the other—the father or the mother—so there must be a move towards equal opportunity for both and both taking their responsibility. We must ensure that the increase in the benefits structure to move people into employment does not move people into poverty, and the value of the money must be retained.
	On the privatisation of some services in the Jobcentre Plus area, I hope that such things will stay within the control of the state, but on the understanding that the relevant bodies must work with the voluntary sector and private partnerships to deliver the best for those who wish to get back into employment. I have concerns, too, about the office structure of Jobcentre Plus facilities; I recently visited one with a client of mine, and I felt that the open-plan structure is not necessarily the best for everyone. The last thing that someone who has been made redundant or someone who is suffering from ill health, especially mental ill health, wants is to be spoken to in a room full of people. We need to look sympathetically at how we deal with such individuals.
	My other worry on Jobcentre Plus is that in the area I represent, at least, it has been unable to answer a number of benefit questions. Benefits are being dealt with at a central location by telephone, and people cannot ask questions in person. Again, that does not help many of our constituents. No one should be taken off benefit until their appeal is heard; stopping someone's benefits when they have an appeal in the system cannot be right.
	The welfare state was created to help those individuals into employment and to support them when employment was removed; it must not involve an alienation or stigmatisation of the individual. I know that we have all received a significant amount of paperwork, either by post or through e-mail, over the past few days; this has probably been one of the biggest postbags that I have received on one issue. I urge the Committee to examine all the information coming forward and to take into account the concerns of all the organisations that want to work with the Government to deliver the best system for these individuals to get them back into employment. This Bill is probably one of the most important that we will ever deal with, and I wish the Government well in its progress.

Dai Havard: I apologise Madam Deputy Speaker. I was referring not to you but to the Government; that is what I meant and that is what I should have said. The point I seek to make is a simple one: how things are done is the guts of this. There is a lot of commonality about what should be done—the need is obvious and some of the solutions are agreed. How they are applied is a very important part of the argument, and I warn about how that is done.
	I have encountered people who are trying to involve themselves in the new architecture of contracting that comes under the existing legislation and the new regulations. They tell me that if the Government are not careful, they will destroy capacity rather than embellish and create it. What they do not want is to be involved sometimes in what is described as market process, because that is not the efficient thing to do. That discussion must be had, because sometimes it is valuable to put things out to competition, but sometimes it is not. To have a slavish idea that it is always better if things are put out to competition will not provide us with either efficiency or utility and certainly will not provide us with sustainability. Ever since I came in this House in 2001, I have made it clear that it is sustainability of investment that will solve these issues, but how we apply it is equally part of the process. I shall be very interested to see how this Bill progresses, because there is clearly a lot of consensus about it.
	However, there is confusion among the very best people who are helping to provide solutions, and the Government do not need to compound that. They need to explain to people how they can work collaboratively with the processes that the Government wish to put in place, because that is not clear at all. I have had this discussion informally with the Minister for Employment and Welfare Reform and with the Minister for Disabled People, and I would like them to visit my constituency and speak to these very agencies that wish to collaborate with the DWP, not to compete with it. These agencies do not wish to take over its function when it is not appropriate to do so, although they certainly wish to absorb part of its processes if it is valuable to do so. They are not interested in being in a situation where they compete for someone else's resources. They want to work collaboratively, not to compete with each other to provide solutions. They know that when someone with a mild mental health problem turns up at the DWP, the DWP will have to contract someone to help, and the local health boards have been very helpful in such cases. Indeed, that process has been very successful, so why does that mechanism for collaboration have to be thrown out and replaced by private enterprise, which will do the same thing but with the imperative of making a profit? My fear is that that will mean a different approach for the individual.
	Much has been said about tailoring activity to the needs of the individual, and I agree with that approach. A constituent of mine is now doing a degree in nursing at the local university. She is a single parent and the only reason she left the house to start that process was to learn how to ice a cake for her daughter's birthday at the healthy eating classes run by the Workers' Educational Association. That is what liberated her to start her journey into education, and there are many such journeys to be made. Many local organisations have collaborated to provide that result for that individual. That is the lesson that we need to learn—not to jettison activity from the public sector for some political obsession with the market.
	Some people seem to think that all the public sector should do is set contracts and monitor performance as a commissioning agent, not a delivery agent. We need to get over that particular political prejudice and look at the reality. If people visit my constituency, I will show them that reality. We need to get on with doing what is really important, instead of trying to introduce some spurious market.

Meg Munn: I want to concentrate on those people who want to work, but who, because of the prejudice of others or the lack of appropriate support, find it difficult to get into work at all. I will concentrate primarily on people with a learning disability, but many of the issues also apply to people with physical disabilities and people with health problems, including mental health problems. My hon. Friend the Member for Kingswood (Roger Berry) has already ably covered many of the issues.
	Mencap tells us that there are 800,000 people with a learning disability of working age in the UK. They are the disabled group most excluded from the work force and when they do work it is often for low pay and part-time hours. The estimated rate of employment for people with a learning disability is only 17 per cent. compared to 49 per cent. of disabled people as a whole and 74 per cent. for the working population. A study has shown that, in contrast to this low figure, 65 per cent. of people with a learning disability would like to work.
	The Government have taken a lead on issues of equality and signalled that no one should be left out because they have a disability. The Mental Capacity Act 2005 was welcome because its emphasis was on what people could do and on allowing them to do it, rather than assuming that because a person might not be able to manage one aspect of their life they could not manage any other. The introduction of the disability equality duty—a requirement that public bodies promote the equality of disabled people both in the services they provide and in their employment practices—was also important.
	As we are experiencing significant pressure on the economy and job losses, as many hon. Members have mentioned, it is easy to see how getting learning-disabled people into work might become a lower priority. But if we are serious about equality, we cannot allow that to happen. I welcome the focus in the Bill on helping disabled people. Clearly, many people will struggle to get jobs, so it will be important to have a realistic assessment of the skills—both work skills and life skills—that will increase the likelihood of employment. There needs to be consideration of the opportunities for learning and the development of skills that will be needed when the economic situation improves.
	As I pointed out in an intervention on my right hon. Friend the Secretary of State, much of the literature around this Bill refers to getting people back to work. Many disabled people may never have worked before, or their experience was a long time ago which means that the world of work is now entirely different. It is not therefore surprising that the proposals as they are portrayed in the media often frighten people who envisage that they are going to be forced into a situation in which they cannot cope. It is therefore essential that the promise of personalisation is real. To start with, we need to find better ways of describing what it means.
	I understand how terms are developed to describe processes, but they can easily sound to ordinary people—and, indeed, to Members of Parliament—like a foreign language. Personalisation must mean giving people the help that they need in the way that they find most helpful. That might mean the use of advocates. Attention must also be paid to the process by which people are moved from invalidity benefit to employment support allowance, as it is likely to be a trigger point for anxieties.
	I seek an assurance from the Minister that the regulations made under the Bill will be subject to consultation. Many people fear what this legislation might mean for them, and reassuring them that there will be opportunities for them and organisations that represent them to comment on regulations is one way in which the Government can lessen that fear.
	I am pleased that the DWP has produced an easy-read version of the report on conditionality rules, although it is a long document. I would encourage the widespread advertisement of its availability and the selection of relevant bits, otherwise it is quite confusing. I also advocate the production of easy-read versions of other important documents, perhaps with leaflets that focus on particular issues that will affect learning-disabled people.
	It is also important that safeguards are put in place to ensure that disabled people are not sanctioned inappropriately. Personalisation will mean nothing if advisers are not adequately trained to understand the needs of disabled people. For example, concern has been expressed about the provisions on failure to comply without "good cause", and I seek assurance that "good cause" will include failure to understand what was expected or the lack of adequate support to enable a claimant to comply with the requirements.
	Many people with learning disabilities who have had the support to enter and stay in work enjoy the positive aspects that we all experience, including a sense of purpose, self-esteem, financial reward, the social aspects and the opportunity to use the skills and abilities they have. But, as I said at the outset, for too many people that can mean low-paid or part-time jobs, so I urge the Government to ensure that there is real equality for people with learning disabilities. They should be able to work at not just any job, but one that they have both the skills and abilities to do and one that they aspire to do.
	Support for employers can also be an essential part of taking on a new employee who has a disability, and this needs to be part of the work that is undertaken. I was pleased to see in the White Paper recognition that volunteering can be a legitimate and effective way for people to acquire work skills. In the right setting, someone who has not been in employment for some time or at all can use the opportunity to experience conditions akin to a work place, to learn new skills and to experience the disciplines of the working environment. I recently visited the charity Emmaus in Sheffield which has developed a social enterprise that helps homeless people with accommodation and work. They take volunteers, including adults with learning disabilities, to work alongside the residents and give them the opportunity to experience a productive working environment. That can be a useful and important step into paid employment.
	My final point is that with such a low employment rate for people with learning disabilities, we are clearly a great distance from achieving equality. I urge Ministers to pay attention to the needs of those people when developing the systems set out in the Bill. Many people approach the issue from the standpoint of fear of the unknown, but it should rather be an opportunity to offer people with learning disabilities more help and support than they have ever had. May I urge the Government, in seeking to offer that support, to ensure that they draw on the experience of organisations that have extensive experience of such work and can show that they have supported people into meaningful long-term work? I urge the Government to recognise that such skills may be found in small local organisations and not just in larger organisations that may initially appear better equipped to bid for contracts.

Russell Brown: I welcome and support this Welfare Reform Bill. The Government have shown conclusively that the choice between helping the poor or reforming welfare was a false choice—it was not a case of having one or the other. Radical welfare reform goes hand in hand with the support of other policies such as tax credits and the national minimum wage.
	In knowing what works to help people back to work, the Government must go further to tackle the great inequalities that still exist. Those inequalities hold people back, excluding them from the labour market and disadvantaging them and their communities at the same time. For many in my constituency, there has been a clear recognition over recent years through the new deal that paid work is the best route out of poverty. At the same time, however, too many people believe that there is a right to a life on benefits. I shudder to think how much talent is being wasted in our communities because of the belief that benefits will see people through life.
	During the'80s and early'90s, I was employed in the manufacturing sector. The company that employed me with was like many others and there came periods when it had to downsize. Of course, one of the first groups to be approached was those over the age of 50. An offer of early retirement along with an enhanced severance package was the order of the day. Many people seized that opportunity, but I was disappointed by the fact that when I bumped into many of those ex-colleagues not many weeks or months afterwards they told me that they had quickly moved on to incapacity benefit. They were fit, healthy individuals, albeit that they were in their early to mid-50s, but suddenly they had become unfit for work and were on incapacity benefit. That trend went on for far too long.
	I also recognise that there are those who, for one reason or another, find themselves unable to continue in employment, more often than not because of a medical condition. Changes that we have made to replace incapacity benefit with employment and support allowance for new claimants is the way to ensure that those individuals get the opportunity to develop their talents and use their skills by returning to the workplace, albeit perhaps in an entirely new and different role. However, it is important that in accordance with the Gregg review model we do not force those who are on employment and support allowance, and attending interviews with pathways to work providers and developing a personalised plan to get back to health and into work, to apply for or take any specific jobs.
	I want to consider the issue of drugs, which has been mentioned, and of those who are hooked on drugs. Drugs are undoubtedly a scourge of modern society, I suspect in each and every community represented in this House. I welcome the new system for drug users on benefits, with the provision of tailored support to help them get off drugs and to move into work. I do not underestimate the challenge. Drug users will have the chance to turn their lives around, and in return they will be expected to take up that support so that the benefits help them overcome the problem rather than finding their way into the pockets of drug dealers. I suspect that that system might well come with significant costs.
	Part 3 of the Bill deals with child maintenance, and Members from all parties will at some time have dealt with extremely difficult child support cases and individuals in arrears, as I mentioned in my intervention on the hon. Member for Northavon (Steve Webb). It became frustrating to me very early on in my present role to see individuals in arrears who were living way beyond their means, running not just one or two cars but sometimes three or four and having numerous holidays throughout the year. Something was seriously wrong.
	I understand that, as one of my constituents suggested to me, there will be anxiety that authority is being taken away from the courts and placed in the hands of civil servants, although we all recognise that the courts process has held things up and has not helped. I would even go so far as to say that had the court system worked, we would never have had a Child Support Agency. The CSA would never have existed if the courts had been fair and equitable in each and every case they handled. If there were two identical cases, one in Dover and one in Dundee, how could the courts have come up with totally different results? The CSA exists, in my view, simply because the courts never worked properly in the first place.
	These have been called difficult and unprecedented economic times. We have heard from the hon. Member for Glasgow, East (John Mason) about the meeting with the Scottish colleges that he and I attended yesterday along with other colleagues. Further education colleges are potentially the one growth area as people will be looking to upskill and retrain and to seek other varieties of support, but the 16-hour rule could drive people away from colleges. I hope that that can be considered in Committee, if possible.
	I want to mention another matter that has been mentioned this afternoon, which is not in the Bill. It was raised by my right hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett), who asked the Secretary of State about those who are partially sighted or blind. They have fought shoulder to shoulder with the Royal National Institute of Blind People for a higher rate mobility component of disability living allowance. I took a small delegation of Back-Bench Labour colleagues to meet the Secretary of State and my right hon. Friend the Member for Stirling (Mrs. McGuire) when she was the Minister with responsibility for disabled people. It is a matter of equality, social inclusion, employment and independence in family life.
	In the limited time that I have left, I want to give an example of that equality. It involves a lady called Jenny, who was 52, visually impaired and a volunteer worker for a disability support group made up of people with physical disabilities. Jenny could not get to work without a lift from a colleague with physical disabilities who drove his own car. She says:
	"None of my colleagues at the disability support group were visually impaired, they all had physical disabilities. Most of them drove cars. I depended on a colleague with physical disabilities, who drove a car to give me a lift to work—otherwise I wouldn't have been able to get there. I considered myself then, and still consider myself now as having far greater mobility problems than most people with physical disabilities who can drive a car—but I receive less benefit. It's unfair and unjust."
	In discussions with Ministers and officials at the Department for Work and Pensions, representatives of the Royal National Institute of Blind People and other colleagues have agreed that the principle that we must do something to help people like Jenny is right. The Bill is about getting disabled people and people who are partially sighted and blind into employment, and I hope that the Minister can find some clause to which measures to help such people can be attached. When he winds up, I hope that he can give us a glimmer of hope that the Bill can be used to make what would be a vast difference to so many people.

Phil Wilson: We are, but the Government are in a position to help us get through the difficult times ahead—unlike the previous Administration, who just left people to their own devices as they closed down whole communities. The difference between now and then is that this Government are not prepared to do that.
	The Opposition say that they agree with parts of the Bill, but that consensus will be shown to amount to nothing when their mask slips and we find out that they believe that the role of capital markets is to make money out of the misery of others. However, the default setting of this Government is to help others: we do not pass by on the other side, but as I have said and shown, the Opposition's default setting is to do just that.
	The Government's commitment is proved when we look at Jobcentre Plus, about which the National Audit Office report of February last year said:
	"It introduces a radical shift from the former impersonal surroundings of the Jobcentre and Social Security offices to a modern retail-style environment and has a major impact on the way staff interact with customers and hence the quality of service provided."
	Some 86 per cent. of those surveyed by the Department for Work and Pensions who use Jobcentre Plus were very satisfied or fairly satisfied with the services that it provided. I am particularly impressed by its role with regard to the rapid response services that it provides and takes part in.
	I want to explain what happened in the case of Electrolux. It is in the neighbouring constituency of Bishop Auckland, but a lot of my constituents would have worked there. Jobcentre Plus was involved in the redundancy situation there from day one. It attended meetings with partner organisations and senior human resources managers, and rapid response services were deployed there. A resource centre was set up. Jobcentre Plus supported and attended two on-site job recruitment events, gave individual advice to the work force and gave redundancy presentations to management and trade union representatives.
	As a result of the involvement of Jobcentre Plus from day one, 75 per cent. of the 450 people who were made redundant got jobs or went into early retirement soon after that. That is a great example of how Jobcentre Plus works. We Labour Members believe that the unemployed are people, not just statistics, and that every time a worker loses their job, it is a personal tragedy.

Nia Griffith: I shall not repeat the many excellent points that hon. Members have made, in particular my hon. Friends the Members for Aberdeen, South (Miss Begg) and for Kingswood (Roger Berry) in their remarks about disability and the need for a clear differentiation between fiscal measures and what the Bill sets out to do.
	I firmly believe that the Bill goes in the right direction, and that rights and responsibilities are the way forward. We should all pull our weight. If we ask anybody around the country, that is the usual answer that we will get. People should be usefully occupied, whether in paid employment or in caring roles. We should make sure that we give proper support to those who need it.
	We need to be careful that people do not muddle up what the Bill seeks to do with the difficulties that we face in the economy and the fact that some people will, unfortunately, lose their jobs. We know that when we talk about conditionality, we are not talking about the sort of people who are desperately anxious to get back to work and who will do everything possible to find further employment if they are unlucky enough to lose their jobs in the current economic circumstances.
	There has been considerable misinformation about the situation of single parents. We are not talking about 14-hour factory shifts for people with very young children. Although there are some well organised, capable and fortunate single parents who know what they want to do and how to organise their lives, we know that a significant number of single parents come from difficult and inadequate backgrounds and need all the support they can get.
	For those young people—often they are young—it is a matter of basic skills such as parenting, reading, writing, numeracy and IT skills and confidence, which we take for granted. They need those skills both in order to help their children develop better—speech development, for example—and in order to better their own prospects as their children grow up. Everybody would agree that the support now being made available is the right sort of support. Proper child care and proper help can do an enormous amount to build confidence among young parents who find themselves at the margin of society.
	The proposed measures have essentially been a pilot up till now. We must make certain that when the Bill rolls that out across the country, we have the necessary staffing levels and trained staff ready in our jobcentres. It is an extremely difficult job. Very often staff in jobcentres are faced with tremendous frustrations, depression and difficulties from their clients, and sometimes even clients who do everything they can to be awkward. It is important that we provide support and, if necessary, increase staff numbers if we want to carry out these programmes and possibly cope with other unemployment difficulties.
	We should make certain that we support employers. I have seen employers bending over backwards to help to find work and provide support for people who find it difficult to get themselves to work in the morning—employers who have been very patient and who have succeeded in getting people back into work, although one would not have thought they would manage to do so. But we all know that although many people are able and willing to help themselves, there are a few who play the system. We must do something about that.
	When I talk to groups of young people, they invariably tell me that everybody should pull their weight. Sometimes they think that I am completely mad, because I talk to them about being shipwrecked on a treasure island. They say, "You have come to talk to us about politics." I ask them what they would do, how they would organise themselves, what rules they would make up and how they would sort out food and shelter. They always say, "Everybody should pull their weight. Everybody should do something." When I ask them what they would do about a poor, unfortunate man who has lost his legs in the shipwreck, they say, "We will feed him, but perhaps he can sit by the fire and do the cooking." They have the idea in their minds that everyone should contribute. When I ask them about a lazy, idle, selfish person who does not want to help or who wants to finish early—this relates to the points raised by the hon. Member for Glasgow, East (John Mason)—they say that there should be no free ride and no food. Their suggested sanctions are far tougher and far less tolerant than the conditionality in this Bill. They make it clear that if people can, they should.
	We all know that 99 per cent. of people do not need conditionality, but we also know that a few people play the system again and again. We all know about those people, because our constituents tell us about them, and there must come a time when the whistle is blown on them.

Nia Griffith: I disagree. As a former teacher in large comprehensive schools, the majority behave, and we deal with the ones who do not. There is no way that we can deny the majority the rights and benefits that they deserve.
	The Bill is not an island; it is part of a range of measures that we have implemented. The carrot is just as important as the stick, if not more so. One of the most important things that we have done is introduce the national minimum wage, which we have regularly raised. Making work pay is undoubtedly a tremendous incentive. Of course, it matters that people get more if they work than if they do not work.
	One issue with the minimum wage is the lower rate for 18 to 21-year-olds—it is about £1 less than the full adult rate. We need to consider what we can do with our 18-year-olds, who are legally adults. Perhaps we are not giving them as much of an incentive as we should to get off to a good start in work. We are doing an excellent job with the entitlement to training, skills or work-based learning until the age of 18. We need to go on from that and consider raising the minimum wage for 18 to 21-year-olds, so that it matches the adult rate and young people have yet more incentive to get into work to start with and not to get into the bad habit of thinking that they can get away with sitting on benefits, which unfortunately happens in some communities where expectation is low.
	The Bill is clear on dealing with people as individuals and providing an enormous amount of support, but sometimes we forget how people have ended up in their situations. We need to think carefully about mental health at work. In the '80s and '90s, there was a fierce competitive spirit that involved no leeway anywhere in any workplace and no patience with anybody who was not going to deliver 120 per cent. That approach often led to breakdowns and an atmosphere in which people felt persecuted rather than appreciated and where workplace bullying was rife.
	A culture of unrealistic expectations or punitive management practices can lead to a range of stress-related illnesses, both physical and mental, which can lead diligent employees to be forced to give up work. We need to encourage and require employers and managers to pay greater heed to the physical and mental health of their employees, to look out for early signs of problems, to provide support and flexibility to pre-empt deterioration and to help to keep people in work rather than driving people out, which can engender feelings of failure and guilt. All the good work that we are doing with this Bill would be supported by the workplace being friendly to people before disaster strikes and they are overwhelmed by certain difficulties. The principle behind the Bill is that in developing people's potential we should look at what they can do, and the same is true in the workplace. We need to be sensitive to what people can do, and to when we might be pushing them too far.
	I reiterate some of the concerns of my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Havard) about a plethora of providers plaguing people to attend interviews. Unfortunately, I have witnessed how in some of the pilot schemes some of the private providers have sent out some rather unprofessional material and pestered people. Luckily, the manager of the jobcentre concerned put things right and sorted things out for the people involved, but we need to be wary: any use of private providers needs careful monitoring. We are using public money to pay those providers and we need to make sure that the money is not going only into profit, that corners are not cut and that individuals are not poorly served.
	We need to make sure that such providers understand the principles of what we are doing in respect of individual care and support, that they really do tailor the packages and that they are not looking for quick profits by taking the easiest cases and leaving the more difficult issues. Furthermore, we need to be absolutely certain that we train people properly and ensure that those offering to provide services have the same types of training that we would expect for our own employees.
	Having said that, I should say that the Bill is very welcome. We need to think flexibly about how it can be made to work and about not only how we do things, but what exactly we hope to achieve and how we make the outcomes sustainable. It should not be a matter only of getting people back into work, but of keeping and helping them make progress in their work from then on.

Adrian Bailey: In common with others, I welcome the Bill, which develops the concept of rights and responsibilities. I see it as another in the series of welfare reform Bills, introduced by the Government, that seeks to move the welfare system from being a safety net that trapped more people than it rescued to being a proactive and personal support system that will enable people to move from one job to another, or from long-term unemployment into a profession with appropriate skills, so that they can flourish.
	That is important for the individuals concerned, but above all for the economy. Obviously, any successful economy has to maximise the talents of its population. Above all, the much-talked-about credit crunch and economic downturn, far from providing an excuse for not introducing the measures, actually highlight their relevance better than ever before. Obviously, when more people are becoming unemployed, strengthening the model designed to move them from unemployment into work is more relevant.
	During the recessions of the 1980s and 1990s the Conservative Governments failed to do that. That led to a situation that I saw clearly in my constituency: even when there was an economic upturn, unemployment was still higher than average because a large residual number of people were still in the welfare system, not having been trained to get the jobs that had been created. In my constituency, skills shortages and job vacancies were allied to higher unemployment. I see the Bill as essential to stopping that from happening in future.

Adrian Bailey: I am not going to bandy figures around with the hon. Gentleman, but I can say that unemployment in the 1980s and early 1990s was a lot higher than it was in 1997 and is in the current situation. Also, the number of people on welfare benefits was considerably higher than the national average.
	It is obvious, as was noted by the chambers of commerce, that this is the point where we should be introducing systems to train people for when the upturn takes place. That is a message that is also coming through to me from local business men. It is not only a matter of national benefit, but important for the individual. The health benefits of having people in employment are self-evident, as is clear from the contribution made to the debate by Dame Carol Black. People denied work will tend to become introverted and lack social confidence, and there are related physiological conditions that go with that. This impacts on the health service, people's well-being and the national economy.
	Above all, it is essential to take children out of poverty. Obviously, the income that comes with a job is an essential part of that strategy, but over and above that there is the change in aspirations that comes for children who grow up in a house where there is a breadwinner—somebody who is succeeding. That considerably affects children's confidence and aspirations; without it, they are more likely to grow up with fewer aspirations and perhaps accept a life on the dole as their future.
	I want to talk about the social fund. First, let me say that I am a Labour and Co-operative Member of Parliament and, as such, a long-standing supporter, member and promoter of the credit union movement. I am therefore pleased about the recognition that credit unions could have a role to play in providing the social fund. That is an acknowledgement that credit unions are community-based financial organisations that often serve the elements of local populations that are unable to access financial services from other providers. It is certainly possible that they could play a role. However, I could not stand here and say that credit unions provide a comprehensive and possibly better service than we have currently. We must recognise that this is both a challenge and an opportunity. My hon. Friend the Member for Warwick and Leamington (Mr. Plaskitt) said that credit unions are accessed by only a relatively small proportion of the total electorate; in fact, it is about 700,000 people. Inevitably, therefore, such a service provided by credit unions alone would be subject to a postcode lottery, even if one accepts that they are likely to be embedded in communities that are perhaps more likely to use the social fund than others.
	I am pleased that the Minister has nailed the canard about the interest charged on loans from the social fund. We are talking about financial institutions, albeit small and often operating on small margins, that have to survive, so there is the issue of what sort of payments the Government would make to credit unions for operating this facility.

James Clappison: The hon. Gentleman is making a considered and well informed speech, but he refers to that idea as a canard. The canard actually comes from the Government's own consultation paper, the back of which refers to charging interest on social fund recipients. It sets out the impact of that and how social fund recipients would end up paying more under the Government's proposals.

Adrian Bailey: I will not give way again, because other Members are waiting and I want to develop my argument.
	The exercising of the social fund by credit unions would benefit both the Government and the unions themselves. With the right financial arrangements it could undoubtedly provide people with a more sensitive and community-based service and help the expansion of the credit union movement. The Department for Work and Pensions must work with other Departments so that there is a joined-up approach, to coin a phrase.
	Credit unions need offices if they are to deliver such a service. Post offices provide a possible network of offices, and we should consider the matter in deciding on the future development of the post office service. The work could even be carried out in Jobcentre Plus offices, complementary to the other services that they provide. If a network could be set up, there would be a whole range of other challenges in ensuring that the necessary financial support services could be provided. My hon. Friend the Member for Warwick and Leamington expressed some original and innovative ideas about that, and I cannot help thinking that if the Government were to take those up and work with the credit union movement, there would be enormous potential to develop a more consumer-sensitive process, better financial support and better exploitation of the available Government resources.
	Above all, there is the second potential beneficial impact. By using the loan fund facility, engaging with a financial institution and developing the saving habit, more people from hitherto financially excluded communities will become more economically resilient in future. One of the Government's objectives is to get more and more people into the saving habit and to develop financial education, and that is a potential long-term spin-off of my suggestion.
	I conclude by emphasising that the thinking behind the Bill is still only embryonic, and that pilots are needed. Judging by the proposals in the Bill, however, they will be implemented. I would like the Department to work with other Departments to take on board the implications of this suggestion and ensure that they back moves to develop the credit union movement in providing the social fund. That would be to the benefit of the policy in question and a whole range of others.

Katy Clark: It is a pleasure to follow my hon. Friend the Member for Glasgow, South-West (Mr. Davidson). He will not be surprised to hear that I do not agree with everything he said, but as so often, he highlighted some of the central issues in the debate, as well as some of the groups that are in most in need of support by the Government at this time.
	The Secretary of State said in his opening remarks that the Bill was about transparency. As with other pieces of welfare legislation, one problem is that many of the steps that will be taken are not actually built into the Bill; we often find that they come later by way of regulation. One of the risks with such enabling legislation is that Governments of a different political persuasion will also be able to bring in regulations through the same mechanism at a later date, which Parliament would not be willing to vote for now.
	The Bill is of great significance to my constituency and, I believe, many other constituencies like it. I represent an area that has not really recovered from 18 years of Tory rule, as we have some of the highest levels of unemployment in Scotland. Over the 20 years of Tory power, we saw large industry after industry closed. There used to be an ICI plant in my constituency that employed 17,000 people in the 1980s, yet by Easter this year only 200 will be working there. There used to be steelworks employing thousands of people in my constituency and that of my hon. Friend the Member for Ayr, Carrick and Cumnock (Sandra Osborne). When I was at school, 10,000 people worked at the Killick pit in south Ayrshire: those jobs have gone and in their place we have had only small industries and service sector employment.
	Despite significant increases in employment in my area since 1997—more than 25 per cent. more people are in employment now than they were then; even since 2003, more than 1,000 more jobs are available in my constituency, despite some quite worrying employment figures over the course of last week—we face the difficulty that employability and skills are a major problem. The proposals that hon. Members have spoken about today are absolutely vital in constituencies such as mine. I have to say that the sentiments and words used by so many hon. Members about the kind of support they believe should be provided to those who need to get back to work are exactly the sort of initiatives that we need. Many such initiatives have borne real fruit over the last 10 years.
	When my constituents go into their Jobcentre Plus office, they tell me that the experience they receive and feel is not such a positive one—and I find it difficult to believe that it will be much different in other parts of the country. It is a difficult time for them, not necessarily through any fault of Jobcentre Plus staff, as they do not necessarily have the resources they need to provide the personalised assistance that so many Members have spoken about. We have to incorporate that aspect into our debate and be real about the situation we face and the kind of people we are dealing with.
	It was interesting to note that some of the comments made by my hon. Friend the Member for Glasgow, South-West took us back to debates that some of us hoped had been left behind many decades ago—the concept of the deserving poor, for example. The whole idea of the welfare state and the benefits system was that it should provide a safety net, and it has done that. I do not accept the notion that the safety net has simply been a trap for people. I believe that it has been a liberation for millions of people, particularly women who, for the first time ever, have been given financial independence. We should emphasise that regularly, and not allow the welfare state to be talked down.
	Because time is short, I shall confine myself to three aspects of the Bill. The first is the "working for your benefits" scheme, which is linked to the general question of whether the purpose of benefits is to provide an absolute minimum to ensure that people do not live in squalor and poverty. I think it important for us to restate our belief that that is essential, that it is not acceptable for us to throw people on to the scrap heap even if they have not behaved in a particularly deserving or responsible way, and that it is unacceptable for society as a whole not to take collective responsibility for every member of society.
	Some of the concerns about the language in certain parts of the Bill, and about regulations that may result from it, relate to when sanctions will be used. Particular concern has been expressed about those with responsibility for young children. I consider it unacceptable for sanctions to be imposed on the parents of younger children who are unable to carry out the work-related activity proposed in the Bill. The only effect would be an increase in poverty among both women and children. Given the huge amount of work that the Government have done in trying to meet our child poverty targets, that would be a step backwards. The fact is that not every member of society is as able to cope as others. Society contains many vulnerable people with chaotic lives, and we need a benefits system on which they can rely.
	Another issue that has been raised is that of lone parents. There are 1.9 million single parents in the country, but they cannot all be lumped together. They are very different types of people who just happen to be single parents, and they should all be treated equally and fairly. Society owes it to them to support them in the work they are doing in bringing up children.
	I shall raise only one more issue, given the shortage of time: the privatisation of the public sector and the welfare state and, in particular, the externalisation of providers of the social fund, which is an emergency provision used by many people in great difficulty. We ought to question whether it is appropriate for loans of that nature to the poorest members of society to be handled by companies seeking to profit from such work. There is a risk that, given the nature of those companies, they will go about the process, particularly the process of recovering the moneys, in a very heavy-handed manner. There is real concern about that proposal, and I ask Ministers to consider it again over the coming weeks. Those who work in Jobcentre Plus have had a huge amount of training and are well aware of the needs of the most vulnerable people, and I believe that to take their work away from them and put it in the hands of private contractors would be to take a huge risk.

David Anderson: The Secretary of State said that the debate was about changing lives, and he was absolutely right. It is about changing the lives of real people.
	I want to talk about my experience in the real world—the real world in which in 1969, as a young man, I worked for the National Coal Board. No one was ever put out of work because they were ill. There were men who had lost limbs, had lost eyes, or had chests full of coal dust, but the paternalistic attitude of the Coal Board was "If these people want to work, let them carry on working". Let us contrast that with the position 20 years later, in 1989, when the National Coal Board in the guise of the Conservative Government's policies was sacking men aged 20, 30 and 40. As my hon. Friend the Member for Dumfries and Galloway (Mr. Brown) said, men of 40 or 50 never worked again after being thrown out of work. They had no self-esteem, and did not know how to go forward.
	We are talking about changing the lives of real people. I had the terrible experience in the 1990s, when I was a trade union representative in a local authority, of going through an ill-health retirement programme with literally hundreds of home care workers, women in their mid-50s who had worked for 25 or 30 years and literally devoted their lives to the people in their care. Those women were worn out and could not carry on doing the job. In reality, they should have had the sort of things we have been talking about today: personalised help to move into other work. What we did instead—I am not proud of this—was to encourage these people to take ill-health retirement. That covered up the fact that job cuts were being made, but those people were burnt out through hard work.
	We also need to realise that in the workplace today there are many people who are stressed out. Again I am talking about real experiences. I represented people among the middle managers who did not realise how ill they were until they collapsed at work. The fear of having to go back into that environment absolutely paralysed them. It is not funny to see grown men cry, but that was my experience with some very tough and hard-nosed management negotiators who fell into that trap. We are talking about people in vulnerable situations.
	For the rest of my short speech, I want to talk about disabled people. I am privileged and proud to be the chairman of the all-party parliamentary group on muscular dystrophy. A month ago we set up an inquiry into why people in different parts of the country get different services for muscular dystrophy and have different life outcomes. Last week we met a number of people who are living with the disease, are carers of those with the disease or have just contracted the disease. Across the country 50 per cent. of people with muscular diseases are not in employment. Three quarters of families living with people with this disease are suffering real financial hardship and, as we have heard, 43 per cent. of disabled people are in work compared with 74 per cent. of the general population.
	Last week we heard from the people individually, and they said that one of their biggest worries is that, under the new proposals, the people who assess whether or not they are fit to go to work, like many GPs, will not have real knowledge of a rare disease, will assess them wrongly and will put them into a situation where they are supposed to undertake work-related activity that they will not be able to do. If that is the case, they will fall out of the benefits system altogether and will be in even worse straits than they are now.
	I want to read out some comments from some of the people who were with us last week. Phillippa Farrant, whose son Daniel is 17 and living with Duchenne muscular dystrophy, said:
	"We had to move three times from our current home because of the needs of Daniel. The kitchen and living space is very cramped. This has impacted on our family life—no table to sit around... Benefits are a minefield—okay for the short term disabled person but not for the long term progressively disabled. You have to fill in forms every six months. More and more red tape...Two years ago we had to declare ourselves bankrupt, not because of fast living but because of the cost of looking after a disabled son...The whole benefits system is very complicated—it's hard to understand what you're entitled to."
	Although Daniel is past 16 and could claim incapacity benefit, it is better for the family if he does not. For other families, it is the other way round.
	Andy Findlay, who is 65, told us that it took 18 months to get disability living allowance. When a social security doctor came to assess him, he did not know what the strain of muscular dystrophy was:
	"In his report he said that I was going to get better."
	For Andy Findlay's strain of muscular dystrophy, there is no cure or medication and no way he could recover.
	Laura Merry, a very bright young girl of 19 who is struggling to go to university, said:
	"As I'm getting older I'm getting more involved in looking after myself and becoming more independent but it is very hard to understand all the forms, and the wording is confusing."
	I want to ask the Secretary of State and his Ministers some specific questions. Will they agree to meet people from the Muscular Dystrophy Campaign, so that they hear the experiences of those at the cutting edge—not the professionals, but the real people? I ask them to meet those people to take this forward. Will they also make sure that the specific experiences of people living with long-term progressive muscular diseases are understood by those who will be doing the assessments? If they do not understand them, they will not be able to diagnose correctly and they will give the wrong advice. Will they ensure that we take forward the following from today's debate: that the Minister will come in an official capacity to the inquiry and give evidence to it, and that we will put together an all-party parliamentary group of this House so Members can discuss in detail what to do?
	Before I sit down, I want to say one last thing. The welfare reforms are right and proper—

Sandra Osborne: Given the time constraints we are under, I will try not to repeat anything that has already been said, but I want to support my hon. Friend the Member for Aberdeen, South (Miss Begg) in her campaign in respect of people with sight disabilities.
	I shall focus my remarks on the difficulties that mothers in particular face in getting into work, particularly in relation to child care. I have thought long and hard about the requirement on mothers to take part in work-related activity. This brings us back again to the difficulty of balancing work and caring responsibilities. Although much has been done in introducing family-friendly policies and extending child care, there is still a long way to go.
	In considering these matters, we need only look at the experiences of mothers already in the work force. It is a myth that women staying at home was the norm: working-class women have always worked, through financial necessity. lf it was difficult to sustain a household on one wage in the past, it is even more difficult today. There have been massive changes, which need to be taken into account—not only the rising numbers of children brought up in lone-parent families, but the necessity of young mothers to work nowadays in order to pay mortgages, service debts and provide a reasonable standard of living in line with today's consumer society.
	Historically, women have been encouraged to work, not for their own good but because the economy needed them. What little child care there has been was withdrawn when there were fewer jobs available, when men were regarded as having first call on the work which was available so as to provide the family wage. We are already hearing concerns that in this economic downturn women will be disproportionately affected, so it is doubly important that child care is expanded and not contracted, and that long-term help is provided to enable mothers to join the work force. Of course, in addition to all that, there has been a very strong desire by women themselves to work for their own personal development, and to do so on equal terms with men and for equal pay. Again, we still have a very long way to go on that.
	I wonder how many Members of this House have ever brought up children while living on benefit. I do not mean living on benefit for a week for a TV documentary—I mean for real. It is a stressful, demoralising experience and it is certainly not to be recommended as a long-term situation. That prompts the question of what someone needs to get into work and what can make a difference. As I say, I have thought long and hard, and not only about the principle of working. I think it is useful to consider how things have changed since my time as a young mother in the 1970s and the experience of my daughters and their generation today.
	There are four things that I wish to suggest, the first of which relates to confidence. I was brought up with a strong work ethic and there was a very obvious stigma attached to those who did not work and, for that matter, to lone parents. Many mothers today who have been brought up in poverty themselves, especially if they are on their own, do not have the confidence or family experience to engender confidence, and they need very extensive support to have a chance. I spoke recently to a local organisation that supports parents, and I have found that in many cases, it can take four months of regular engagement before these mothers will even go over the door to join a group, far less look for work. A build-up of support is required and how that is approached is crucial. Where are the resources coming from to develop this level of support in relation to Jobcentre Plus?
	Secondly, the support of the extended family is needed, but it is not always available in the way that it has been in the past—many grandparents are working themselves and cannot afford to babysit free of charge. That should be recognised, as many mothers would prefer to have care provided by their relatives, if only they could access child care tax credits or some other means. I welcome the early-day motion tabled by my hon. Friend the Member for Aberdeen, South that seeks to credit in national insurance the unpaid contribution of grandparents, who save society a fortune by providing free child care—that would be a good starting point.
	The third thing that is crucial is the availability of affordable child care. Back in the '70s, I was in a very fortunate position: we had a Labour Government, and I was able to secure a state nursery place at a nominal cost to allow me to go to college. By the time I had my second child, 10 years later, people could not get a nursery place in Ayr for love nor money, unless they had a social worker. The introduction of universal nursery provision has helped a great deal, but some areas do not have wraparound care, so full-time care comes solely from the private sector. My own daughter has just had a baby and she will be back at work by the time her daughter is six months old. Obviously, I am not one of the grannies who is available to offer child care, even if she could afford me. The going rate for child care is £35 per day and she reckons that she will be paying more than £1,000 per month for her two children—it would be a lot more if she had more than one child under five.
	When I look around, I see that the majority of mothers do go back to work when their children are relatively young, as has always been the case; it has always been only the minority who could afford to choose to stay at home. So there is no inherent reason why people on benefits should not work. Many wish to do so, but, crucially, they need the right type of support to make child care affordable. Any conditionality must take that into account, and I seek assurances from the Secretary of State that no one will be regarded as breaching the rules because they cannot get access to child care.
	In Scotland, the statutory duty on local authorities to secure sufficient child care for parents who work does not apply. The Wise Group has reported that in Glasgow there is a lack of suitable places for parents wanting to work. It is probably harder today than it has ever been to raise children, and I believe that all parents could benefit from some parenting support at some time. At the moment, this is, in the main, down to voluntary organisations, many of which are strapped for cash. Certainly in Scotland there are widespread financial difficulties as councils cut back on funding, and that is affecting organisations that provide support to parents.
	In conclusion, I wish briefly to mention women who have suffered domestic violence. I am very concerned that they will be asked to take part in work-related activity as soon as they leave a violent partner, and I ask the Secretary of State to ensure that that does not happen.

James Clappison: This has been a very good debate, with some powerful personal accounts, including the last two contributions. I do not have time to mention all the speeches made, but I commend my hon. Friend the Member for Bournemouth, West (Sir John Butterfill), who made a powerful speech on behalf of people with sight impairment, which followed an intervention by the right hon. Member for Sheffield, Brightside (Mr. Blunkett) and was supported by many hon. Members on both sides of the House. My hon. Friend the Member for Broxbourne (Mr. Walker) made an excellent speech, making a link between work and wellbeing—the benefits of work. My hon. Friend the Member for Wellingborough (Mr. Bone) also made an excellent speech that raised some very important points about the welfare of people in his constituency and the issue of unemployment there.
	We heard an authoritative speech from the Chairman of the Work and Pensions Committee, who made several important points about giving people skills, preparing people for work, job retention and the point at which people get help. We also heard a very powerful speech from the right hon. Member for Birkenhead (Mr. Field), who was right to remind us of the setting for this debate and the fact that many of our constituents who are out of work are not used to that experience, and we need to bear that in mind. We heard an authoritative speech from the right hon. Member for Stirling (Mrs. McGuire) and a considered speech from the hon. Member for Warwick and Leamington (Mr. Plaskitt) about the social fund, which will bear careful analysis later.
	We had an important contribution from the hon. Member for Aberdeen, South (Miss Begg) and from hon. Members who happen to represent some of the poorest parts of the country. Although I did not agree with everything that they said, it was good to hear their voices. The hon. Member for Glasgow, East (John Mason) made the point about the need to give people incentives to work and the hon. Member for Blaenau Gwent (Mr. Davies), representing another very poor part of the country, gave some striking figures about the present state of employment and benefit receipt in his constituency. He told the House that some 2,600 people were receiving jobseeker's allowance, 6,500 are stranded on incapacity benefit and there are only 218 vacancies. That was a sombre reminder of the problems we face today.
	My right hon. Friend the Member for Maidenhead (Mrs. May) broadly welcomed the Bill. We want to see the contracting, Freud-style reform of our welfare system, and we look forward to exploring the Bill in detail to see just how far it goes in fulfilling that vision.
	I make a specific plea to Ministers that was made by many hon. Members on both sides of the House. Much of the Bill is devoted to regulation-making powers. As has been said, regulations are mentioned 387 times in 114 pages. I hope that the Minister, when he winds up, will give us an assurance that the draft regulations will be published in time for the Committee stage, so that hon. Members can do their job and scrutinise the Bill in detail. We may give the Bill a broad welcome, but there are several issues that we want to examine in detail.
	For example, we need further details about what will be required of lone parents with children under seven. It is right to remind the House of the background to this issue, because the momentum for reform on the issue of lone parents moving from income support to work came from the Opposition, and I pay tribute to the work of my right hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) in that regard. As I recall, it was not until June 2007 that the Government came round to the same way of thinking—after the proposal had been made by the Conservatives. Up to that point, lone parents of children up to the age of 16 had been allowed to remain on income support without extra requirements on them, but at that point a line was drawn at the age of seven. Not only have the Government now agreed with the proposals made by my right hon. Friend and taken the age limit down to seven, but they want to go further still, which was not in our proposals.
	We need to look very carefully at just what the Government will require, and we will have a debate on that. It is clear in the White Paper—I hope that the Secretary of State knows what is in his own White Paper—what he is requiring of the parents of children between the ages of three and six as well as those of children from the age of one. I know that the Secretary of State made his name as a baby-sitter, but we want to prevent his being remembered as a baby-snatcher. We want to look at those matters in some detail. We also want to look at the issue of budgeting loans.

James Clappison: I agree with the hon. Lady. We also think that it is good for lone parents to work, and the evidence is that work is beneficial to them and to their children. However, there is a balance to be struck between the care of young children and the work of parents. We will examine that matter in Committee, which is the right place to do that.
	We will also examine the strange question of the social fund, about which there seems to be a mystery. The Secretary of State seemed to be unaware of the Government's proposals in their consultation document to charge interest on social fund loans— [ Interruption. ] The Ministers are shaking their heads, but the proposal is in their own consultation document. In case it has escaped the Secretary of State's attention, he wrote the foreword to that document only last November. I imagine that he does not sign documents without having read them, and that it was not the fact that my hon. Friend the Member for Epsom and Ewell (Chris Grayling) brought the proposal to public attention that prompted a sudden reversal in Government policy. We look forward to going through those issues in detail.
	Our focus throughout will be on getting people back into work and bringing help to those who need it, even in these dark times. The right hon. Member for Birkenhead talked about a hurricane, and time and again we have come back to the setting of the reforms. For many people, it is striking that the Government have delayed for so long on undertaking those reforms and have then waited for this moment to do so.
	We have had so much talk and so many promises. Since 1997, we have had seven Green or White Papers on welfare reform. The Bill is the 13th piece of legislation dealing with welfare reform; it will be the third Act to be called the Welfare Reform Act and the second such Act in three years. The Secretary of State talked about the difference between active and passive welfare systems, but the Government have been talking about that and claiming that they have brought about an active system since 1997.
	I gently remind the Secretary of State that he mentioned the new deal once and that it was barely mentioned at all during the speeches made by his Back Benchers. It was mentioned in more detail by the right hon. Member for Birkenhead, who powerfully dissected and criticised it and its failures. The new deal was the centrepiece of the Government's reforms since 1997 but now the Government hardly dare speak about it. As the UK Statistics Authority has said, after all the Government's boasts and propaganda about the new deal, the sad fact of the matter for young people in this country today is that unemployment among 16 to 24-year-olds is higher now than it was in 1997. It is going up at the moment, but it was going up long before the credit crunch took hold.
	As the right hon. Member for Birkenhead made clear, the centrepiece of the Government's reform of welfare has been a system that put in place a revolving door, that had diminishing returns, and that failed many young people who kept going back into the system. Those people were made the basis of a claim that the Government had abolished long-term unemployment when all they had done was move people from one queue to another, while more and more young people were unemployed. More people are not in employment, education or training than in 1997. We have to start from the sad position of the number of economically inactive people left behind by the Government, particularly in the 16-to-24 age group. The Government failed to put things right when they had the opportunity to do so, but we look to bring fresh thinking to this subject. It is sorely needed.
	We will build on the proposals in the Bill where that suits our plans, which we put in place long before the Government did. We will build on what the Government are doing, and we recognise where they have gone wrong. Even now, however, we must seek to put things right, and to bring hope to all the people who are going through the present dark economic times. They include those who are losing their jobs, the 2 million who are economically inactive and who want to work and the nearly 2 million who are now unemployed. We must try and bring hope to all of them, by means of a welfare system that acts much more efficiently than what has been put in place by this Government so far.

Tony McNulty: The hon. Gentleman needs to understand that a televisual contraption has been invented that allows people who are not in the Chamber to watch the debate.
	We heard some old flannel from the Scottish National party—I am not sure whether it was a Front-Bench or Back-Bench contribution, but then neither was the hon. Member for Glasgow, East (John Mason)—which I still cannot fully understand. That is a real pity given the Bill's importance for Scotland and the ravages left behind by last Government. At least six colleagues on the Labour Benches made substantive contributions, which is very instructive.
	None the less, I broadly welcome the tone of the debate, and much of what was said in concentrating on the Bill. I understand that people can get confused by references to the Green Paper, the White Paper, the Gregg review and the Bill, all four of which need to be read in their entirety.
	Not everything needs primary legislation, as the hon. Member for Hertsmere (Mr. Clappison) noted, but I can tell him that I have always tried as far as possible to prepare at least the grid of what secondary legislation may follow on from primary legislation. That was certainly true of my approach on previous Bills, such as the one that became the Counter-Terrorism Act 2008. The hon. Gentleman and the right hon. Member for Maidenhead (Mrs. May) made a perfectly fair point about the secondary legislation and other bits of legislation that might follow on from this Bill. I can tell them that, as far as we can, we intend to have at least a draft outline of the direction of travel of the regulations ready for the Committee.
	I am very sorry that I missed the debut of the right hon. Member for Maidenhead. I am afraid that, on balance, the pull of 15 primary and secondary heads from the London borough of Harrow was sufficient to win me over and I was not able to listen to her contribution. Even so, I welcome the broad support that she has given the Bill, and what I hope is the shift in tone evident in her remarks. Her predecessor gave us a mixture of rank opportunism and utter confusion.
	The right hon. Lady appears to have changed her view of the help and treatment of problematic drug users. I was not entirely sure about that from her remarks, but that must be the right direction to go in. She has certainly changed her opinions about passports and driving licences, and I am afraid that she was entirely wrong when she suggested that the Government had been instrumental in withdrawing an amendment to the Child Maintenance and Other Payments Bill in the other place. Lord McKenzie and Lord Skelmersdale both made it clear that, in order to get that Bill through in time, the Tories would not press their amendment that would have removed the Child Support Agency's right to overturn court orders on child maintenance after 12 months in certain circumstances, in return for the Government converting passport removal to a court-based procedure.
	As my right hon. Friend the Secretary of State said, very clearly, the only way to get the measure through the other place was to water it down at the behest of the Conservatives. If the right hon. Member for Maidenhead has shifted her position on that, that is also very welcome.
	With the best will in the world, as my hon. Friend the Member for Bradford, North (Mr. Rooney) will know, the conditionality regime for lone parents and the age shift alluded to by Freud may well have their genesis in the Nordic countries, or in Michigan or Wisconsin in the States, depending on one's view; they certainly do not have their genesis in Chingford, notwithstanding the contribution that the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) makes on such matters, albeit belatedly.

Tony McNulty: No, it isn't, actually. Scrutiny is about looking in a balanced way at both the sticks and the carrots—at the whole sanctions regime, all the conditionality, and all our existing and future reforms outwith the Bill. It is about that, rather than about simply asking, "What happens if a drug user does this, that or the other?" and asking about sanctions. Those are fairly appropriate questions in Committee, but not here, and not in the context of his not telling us quite where he stands on what we will do to help and support some of the most vulnerable people in our community. That is precisely what the Bill is about, in terms.
	I take the points made by my hon. Friend the Member for Bradford, North about the integrated employment and skills services, many of the other existing rules, and the whole panoply of what we are doing in welfare reform, not just for the immediate downturn, but more broadly. We have clearly said that we need to look again at specific extant measures, whether for the short term or in the context of welfare reform, and we will do so, if those measures do not fit in. However, hon. Members cannot say that they support some of those measures if they do not support what we are already doing with Jobcentre Plus—if they do not support the £1.8 billion and the six-month package that we have brought forward.
	On the broad gist of what hon. Members have said, the removal of barriers that get in the way of people getting back into work is absolutely key. The measures are not, as billed, "Any job at any cost," regardless of whether there is child care provision or other elements. I take on board what many of my Scottish friends have said about the paucity of child care provision in some areas of Scotland, not least Glasgow. There is certainly a huge paucity of drug treatment referral centres in Scotland. We are trying to work with members of the Scottish National party to deal with that. We are just trying to get basic figures from them, but they are not being forthcoming.
	As Members have quite properly said, the liberalisation and realisation of the potential of people who have, up to now, been written off is central to the Bill, and to everything else that we are trying to do in welfare reform. That must be right. I totally disagree with my right hon. Friend the Member for Birkenhead (Mr. Field), who is not present, who says, "Whatever you do, don't make the reforms now because of the downturn." We cannot leave the most vulnerable people behind in those circumstances. It is almost appropriate to say that now more than ever is the time to deal with those people. All that we are saying is that everyone should get a chance. No one should be written off or left behind. In welfare reform, and in everything else that we are doing in view of the downturn, we need to do as much as we can to allow people to do as much as they can. I commend the Bill to the House.
	 Question put and agreed to.
	 Bill accordingly read a Second time.

LOW-VALUE CONSIGNMENT (VAT RELIEF)

Janet Dean: Thank you, Mr. Deputy Speaker. I am grateful for the opportunity to raise my concern about the impact upon specialist high street retailers of the exemption from value added tax of personal imports of food supplements, herbal remedies and other products such as compact discs and DVDs from the Channel Islands. My concern is shared by many hon. Members, some of whom have signed early-day motion 152 tabled by my hon. Friend the Member for Bolton, South-East (Dr. Iddon), and my own early-day motion 1767, tabled in the previous Session. I am grateful to the Minister for being in his place and I look forward to hearing his response to the concerns that I raise.
	I was alerted to the situation both by the National Association of Health Stores and by the national retail chain, Holland and Barrett, which has a major facility in my constituency employing 200 people. I do not want to trigger a full-scale debate about the constitutional governance arrangements of the Channel Islands, nor do I want to focus unduly on the way in which to date the islands, like the other Crown dependencies, have avoided meeting their obligations under European Union treaties to implement such measures as European medicines legislation, the food supplements directive, and more recently the nutrition and health claims regulation.
	However, I cannot fully make my case about the serious and adverse impact that low-value consignment relief from VAT is having without explaining that the failure to implement those European legislative measures has allowed to develop in the Channel Islands an export business in food and herbal supplements that can reasonably be estimated to be worth around £100 million per annum, a staggering sum given the small population of the islands.
	This huge export market is generated through very active direct marketing mailshots to UK mainland consumers. Tens of millions of them a year receive catalogues through the post, which promote the products of the Channel Islands companies and appear to come from addresses with reassuringly familiar postcodes which imply that the senders are located in part of the UK, when they are not. Above all, the industry in the islands has benefited dramatically from the provision that personal imports of goods from the islands are exempt from value added tax for consignments with a total value of less than £18.
	I am a great supporter of my right hon. and hon. Friends in the Treasury ministerial team. They have displayed great competence during the recent City cataclysms, but I am left scratching my head wondering what possible justification there can be for giving a huge exemption from value added tax to those products. The impact of this business, with a value of £100 million per year and rising steadily, is substantial. Independent specialist high street health food shops are closing at a rapid rate as their profits are squeezed by this unfair and illegal competition. The loss to Treasury revenues, therefore, is significantly greater than the sum of the VAT on the imports. It is also losing the tax revenues from the struggling independent retailers.
	The scale is staggering. One company alone, created by the merging in April last year of Healthspan Group and Healthy Direct, based in the Channel Islands, now accounts, according to the industry analysts Euromonitor, for 4.9 per cent. of total UK sales of vitamins and dietary supplements by retail value, or a staggering 21.3 per cent. or £49.4million of total UK non-store sales, assuming, as is the case, that the overwhelming majority of sales by that group are non-store, and that does not include their considerable sales of herbal remedies.
	It is not only the specialist food supplements and herbal remedies sector that is reeling under the impact of that unjustifiable tax break. We have all observed the steady decline in recent years in the number of independent high street retailers of CDs and DVDs as that industry has relocated, at least notionally, offshore to the Channel Islands. Tens of millions of imports of such products are now shipped annually into the UK and delivered direct to the homes of consumers at prices that no responsible high street retailer in the mainland could hope to match.
	The Channel Islands authorities have misled officials and Ministers by suggesting that they are cleaning up their act and preventing further relocations for the purposes of tax avoidance. Yet information supplied to me by the independent CD and DVD sector suggests that Jersey is now the fulfilment base for Asda, Play.com, CD101 and BlahDVD. Tesco, which was excluded from the island in 2006, is now reportedly operating again through a Jersey-based fulfilment business, TheHut.com. HMV and Amazon, under a sister company name of Indigo Starfish, operate out of Guernsey.
	The trend of major corporate names shifting their fulfilment to the Channel Islands continues, and the only benefit of the so-called tighter regime is to guarantee additional business for the operators already there. Many of the goods in question are actually manufactured in the UK, shipped to the Channel Islands and then moved back to the mainland through the mail. The sole purpose of that manoeuvre is tax avoidance. Like the Minister, I am a believer in the benefits that competition can bring to consumers, but that competition is unfair and in some cases illegal. It can have no public policy justification.
	The European Commission has begun a formal investigation of the situation. I encourage all those who share my concerns urgently to contact the commissioner with responsibility for taxation and customs union. Such non-taxation is an artificial advantage to Channel Islands companies, and as such is in breach of the sixth VAT directive, a breach which obliges the United Kingdom to take action to prevent the abuse. The situation is clearly one of tax avoidance, which is illegal, and the Government must act.
	Specifically, in European law, where low-value consignment relief is available, it must be applied in a way that ensures that it does not give rise to any evasion, avoidance or abuse, or a distortion of competition on the United Kingdom market. Indeed, directive 83/131 makes it clear that the power of member states to allow LVCR is subject to the above two conditions. The fourth recital provides:
	"whereas the exemptions on importation can be granted only on condition that they are not liable to affect the conditions of competition on the home market".
	Article 1 provides that
	"the Member States shall apply the exemptions laid down in this Directive under the conditions fixed by them in order to ensure that such exemptions are correctly and simply applied and to prevent any evasion, avoidance or abuses."
	The UK is also under a general obligation to administer the VAT system in accordance with the general principles of the sixth directive. As the Court of Appeal affirmed in HMRC  v. IDT Card Services Ireland in 2006:
	"the principles of avoidance of non-taxation, avoidance of double taxation and the prevention of distortion of competition are general principles of the Sixth Directive."
	The distortions to trade in terms of the tax advantages are significant and are contrary to European law, and it is incumbent both in the sense of natural justice and in terms of legal obligation for the United Kingdom tax authorities, rather than those of Jersey and Guernsey, to ensure compliance with the law.
	Treasury Ministers must address that matter without waiting for the Commission. Officials defend the provision, because to abolish it would require the commitment of resources to claim VAT on many small transactions. In fact, on food supplements and herbal remedies alone, the revenue would clearly be in excess of £17.5 million annually, making the exercise more than worth while, particularly when we consider the further tens of millions of pounds of lost revenue from the DVD and CD sector. Indeed, in the pre-Budget report 2006, the Treasury indicated that the lost revenue was already running at £85 million a year, and the problem has grown substantially since then. The only reason why the businesses are in the Channel Islands is to avoid VAT. If the loophole ended, they would relocate to the mainland and suddenly there would no longer be any problem with revenue collection.
	I do not have any truck with claims that ending the loophole would impose burdens on Royal Mail, which is benefiting massively from the huge business not only in delivering the products, but in delivering each year tens of millions of catalogues that make claims that would be illegal if made about products placed directly on the UK market. As a responsible business, Royal Mail will surely want to play its part in ending this abuse and deliberate tax avoidance. Furthermore, ending the avoidance loophole would simply lead to the relocation of the businesses back to the mainland, where the company would still benefit from their business—probably to a greater extent, as profits would not be shared with Jersey Post.
	In the long term, consumers do not benefit from this gross and complex tax avoidance network. Although in the short term they may pay a slightly lower price by avoiding the VAT, market share is becoming increasingly concentrated in all the sectors that I have outlined. Independent retailers are closing, and choice and diversity are being undermined. Once the market is dominated by one or two major players, prices will surely start to rise as competition is stifled.
	Officials frequently confirm that the matter is kept under review. Yet Ministers have admitted in parliamentary written answers that they do not have information on the breakdown by product category of the imports in question. How can they possibly, therefore, keep it under review? What specific criteria is this review using in assessing the impact of the provision? When and how do the Government intend to calculate the total cost to the Treasury in lost revenue, from not only health products, DVDs and CDs, but the other product categories that are exploiting this loophole? By what timetable is the review being conducted? When will its conclusions be known? What compensation will be given to responsible high street retailers suffering loss of business in the meantime? Finally, will my right hon. Friend personally investigate the matter and ensure that this illegal and unjustifiable tax avoidance is brought to an end?

Stephen Timms: I congratulate my hon. Friend first on the auspicious birthday that I understand she will be celebrating in two hours' time. I wish her many happy returns, and hope that I am the first to do so. I also congratulate her on securing this debate on an important subject that she has pursued for some time. I am grateful to her for raising the topic of low-value consignment relief and giving me the opportunity to set out the Government's position.
	The £18 VAT relief threshold applies to all goods imported into the UK from outside the European Union, with the exception of alcohol and tobacco, for which other rules apply. It is important to underline that fact; the arrangements in Jersey and Guernsey are not improper. The £18 relief applies to goods coming from anywhere outside the European Union, and as the Channel Islands are outside the EU, it applies to goods coming from them. The relief falls under European Community VAT legislation that requires member states to exempt from VAT all eligible goods with a value of less than €10. Member states may increase the threshold to €22 if they so wish and, like the majority of the other member states, the UK has always applied the maximum relief allowable since the introduction of the directive in 1983. We do that to reduce the administrative and operating costs of calculating, collecting and paying small amounts of tax on very large numbers—millions—of low-value goods.
	The current UK limit of £18 was equivalent to the €22 limit used by eurozone countries when the limit was first set in 1983. However, my hon. Friend is right to draw attention to some of the effects that that threshold has led to. She said that she thought that the Treasury was losing some £70 million of VAT on health products and quoted a figure from the 2006 pre-Budget report—an estimate of the overall loss to the UK Exchequer from the VAT threshold. We estimate that, for 2008, the amount of VAT exempted by the relief was £110 million. That is a new figure. As she says, it is on the rise, although it is important to underline that any net value to the Exchequer from collecting that revenue would be significantly less because there would be large administrative and operating costs involved in collecting it and considerable difficulties in enforcing any new rules comprehensively given the volume of international mail and fast delivery service traffic.
	There has been a big increase in the volume of low-value goods imported into the UK from all over the world. A large proportion of goods that benefit from the relief are supplied from the Channel Islands, as my hon. Friend rightly pointed out, reflecting the convenience and cost advantage—and, as she said, the familiar postcodes and addresses—that come from using the islands as a base for supplying the UK market. However, we should not lose sight of the potentially significant difficulty of trying to impose a VAT charge even on very low-value items, which would be the case if the threshold were not in place. A wide range of goods are imported under the relief, but my hon. Friend and others have raised particular concerns about the increase in the import of health foods and supplements and of CDs and DVDs from the Channel Islands, and the impact that that is having on UK-based retailers.
	Following discussions with UK officials in 2006, Jersey and Guernsey issued policy statements making it clear that they are opposed to the growth of so-called third-party facilitators on the islands. Those facilitators exist to provide logistical services to UK-based companies, enabling them to benefit from the relief by exporting UK-originating goods through the islands without making any investment in establishing wider real economic activity there. The islands' authorities recognised that that was damaging to their international reputation and credibility and undermined the UK tax base. The policy statement issued by the States of Jersey introduced a licensing regime for companies and facilitators supplying goods by post to UK consumers. Companies supplying CDs and DVDs were granted only a 12-month licence and, at the end of that period, the licences were not renewed, so a number of companies were required to leave the island: my hon. Friend mentioned a couple of them. She also said that one or two had come back in a different form; that is news to me, and I will investigate it tomorrow.
	Since 2007, the Jersey authorities have refused to grant a licence to any new company operating in the CD and DVD market and wishing to relocate from the UK to Jersey. Equally, any new company wanting to relocate to Jersey is required to obtain an operating licence before it can start trading. The Jersey authorities have stated their strong presumption that licences will not be granted when there is no investment in the wider economic activity on the island. Following the withdrawal of licences, only one big company supplying CDs and DVDs from the island to the UK remains; it is a company that has been based in Jersey for quite a long time.
	My hon. Friend mentioned the development of Channel Island-based organisations effectively acting as front organisations for those that can no longer relocate there. That is a fair point, and we are seeing some of that in response to the restrictions that have been introduced.
	As far as Guernsey is concerned, I understand that the authorities there cannot introduce a licensing system similar to the one in Jersey because of the constraints of the local constitution. However, the Guernsey authorities have adopted a policy statement quite similar to that of their Jersey counterparts and used other available powers, including planning controls and employment permits, to limit the growth of activity on the island that involves the exploitation of the relief by UK-based companies. Guernsey has made it clear to a number of UK companies involved in music retailing, including those that have been forced to close their Jersey operations, that it does not wish to see them establish activities on the island.
	I know of at least one big UK company that established itself in Guernsey before the current policy was introduced and remains active on the island. I have been informed that, earlier this month, the States of Guernsey prepared a code of conduct intended to limit the supply of goods to the UK by the mail order sector. The code acknowledges there has been negative publicity about such companies and is intended to engender a certain level of self-regulation. It provides a benchmark of standards that signatory companies are expected to maintain, and it addresses a number of other consumer protection issues including those specific to the food supplements, vitamins and health products sector.
	As a consequence of the measures taken by the Channel Island authorities, we believe that the growth in the music sector there since 2006 has been curtailed. Of course the position might change, and my hon. Friend suggested developments that might lead to such a change, but that was the case at least until very recently. Certainly the exponential growth in the cost of the relief that some feared has not materialised, despite the rapid growth in internet shopping. The figure that I have mentioned underscores that point.
	To address the activities of the remaining companies that are selling CDs and DVDs to the UK market from bases in Jersey and Guernsey, my officials have been discussing ways in which the island authorities can restrain the growth of those supplies. As I think my hon. Friend will understand, I cannot set out details of those arrangements because of commercial and diplomatic confidentiality, but I understand that good progress to that end has been made with the authorities in Jersey. It is proving more difficult to secure a satisfactory outcome in Guernsey, but my officials are due to have a further meeting with the Guernsey authorities very soon. After that, they will report to me on progress and I will consider what further action may be necessary. Perhaps at that stage it would be helpful if my hon. Friend and I had a further conversation about how things have been going.
	Of course, we must bear in mind that the market for audio and visual media is moving rapidly towards electronic downloads over the internet, rather than the sale and dispatch of physical media. That is changing the situation again, and we will continue to keep track of market developments and adapt tax and other policies as required.
	If the Government decided to reform the low-value consignment relief, a number of options would be permitted under European Community law. We could reduce the threshold to the minimum level of €10 or seek a derogation from the European Commission to remove the relief from specific goods such as health products or CDs and DVDs, or from imports from certain countries. However, although some retailers might benefit from such a change, the knock-on effects on others would have to be considered. If the threshold of the relief were reduced to the lower limit, it is estimated that up to an extra 50 million small parcels a year would be subject to VAT. That would require substantially increased resources at Her Majesty's Revenue and Customs for calculation and enforcement of import taxes. My hon. Friend did not express too much sympathy for that concern, but it needs to be taken into account. Indeed, there would be a further impact on Royal Mail and other carriers.